Which exchange rate will show up first, N500 or N150 to $1 US? Naira February’s gyrations from N325 to N405, then N250, might actually be the storm before the calm or the calm before the storm? Find out yourself because the currency is gyrating away potential foreign investors.
Christopher Okoli (American based Investment Advisor) March 1st 2016
In the world of technical analysis, such actions are definitely an indication that the once beloved Naira is about to break out in a mouth-watering up or down direction. Unfortunately, I am willing to make a bullish bet that there will be a downward spiral breakout on the Naira, because the necessary policies to put the currency back to appreciable and meaningful growth have not been instituted. Since 2012, I repeatedly warned and alerted many African countries to diversify their fragile economies away from crude oil, but impunity continuously fed those economies high doses of morphine, giving such economies false sense of growth that could not be sustained in today’s global challenges. President Muhammadu Buhari’s unrelenting effort (although constitutionally handicapped) to bring down corruption to a manageable level has invariably taken that morphine away from the Nigerian economy and the pain is increasingly becoming excruciating and unbearable to millions of Nigerians. Guess who will blinks first, uninformed masses or President Buhari?
In January of 2015, I warned that an inconclusive or postponement of the 2015 Presidential election in the country will definitely add more weight to the already fast sinking Nigerian ship (the pride of black race and giant of Africa). Nigeria can be described as a healthy cow that has been milked for over fifty decades without being fed enough food and nutrients, the cow now needs urgent medical attention, because the morphine that has sustained the cow for the past 20 years is now killing the cow. Nigerian new administration failed to clearly communicate the true nature of the cow (treasury), false hope was sold to the poor masses who are now expecting a quick fix to their nightmares, and now, the masses are increasingly becoming restless. Sorry fellow Nigerians, nobody can get to heaven, without first having carnal knowledge of death, Nigerians must murder chronic corruption before making it to the promised land of new milk and honey.
I was deeply worried about the levels of decaying infrastructures, Boka Haram, financial recklessness, nonperforming assets, hidden assets in the country, the future of crude oil, China’s economic slow-down, global currency war and the 4th quarter global recession of 2016; all these concerns put together, led me to boldly projected once precious Naira to get to N500 to $1 US before getting back to N150 (with workable fiscal and monetary policies). Nigeria, just like many other crude oil producing countries that were slow to diversify their economies is now facing many economic and social challenges. The questions on the minds of millions of concerned Nigerians are;
- Why did previous Nigerian leaders fail to act? Ever since impunity took the center stage in Nigerian political arena, fiscal and monetary policies were prepared and implemented in total disregard of the country’s general interest. Suffice to say that yesterday’s decisions are what Nigerians are experiencing today, and today’s decisions would be what Nigerians would experience tomorrow. Nigerians are suffering today because poor financial and economic decisions were made for the past 5 decades, so let Nigerians live through the pain and then make better decisions to enjoy tomorrow. Diversify the country’s economy and reposition Nigeria for greatness.
- Why did Nigerian Economists failed to warn the leaders of the crude oil sell off? No sane mind can reasonably blame Nigerian practicing economists because impunity mirrored into every aspect of the country. The level of knowledge passed to the fine economists might have been drastically compromised by the destroyed educational system. The government employed economists might not be amongst the best available in the country. The private economists mighty be afraid to speak out because of fear of attacks from government sympathizers apologists. When government fails to encourage divergent and critical views, growth and change gets retarded.
- What are the dangers of the sudden falling and rising of the Naira?
The month of February 2016 might be the historical month for the study of Naira, because such gyrations that created huge technical gaps have never been witnessed in the history of Nigerian Naira movement trends. Naira started the month of February from the low N300s to US $1 rose to low N400s then slide below N250. Such actions will definitely continue to keep foreign institutional and retail investors on the sideline, thereby depriving the country the most needed direct foreign investments into the country.
Rumors and speculations can only have short term effects on the trajectory of Naira, but well articulated fiscal and monetary policies are what the country needs to rescue Naira for good. The financial hawkers are still circling and waiting to strike and kill Naira at any available opportunity. Nigerians must be warned.
Christopher Okoli (Nigerian-American based Investment Advisor) 02/01/2016
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