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Thursday, May 15, 2014

NIGERIA - CAPITAL FLIGHT - Importing goods which also can be produced locally from abroad allows to get foreign currencies abroad

Smooth way to sell NGN against USD, GBP, EUR, CHF

Bringing eggs or any other goods from Liberia to Nigeria allows Obj to get foreign currency. The eggs are imported thus the Nigerian importer -
maybe Obj again - buy them against USD. The CBN will have to allocate USD to Obj in Nigeria for paying the importet eggs to Obj in Liberia.

These USD then can be used to buy EUR, CHF, GBP as well as other currencies to be invested abroad. Perfect way of getting money OUT of Nigeria.

Nigeria's foreign exchange market is highly regulated. Nigerians cannot buy USD, EUR, GBP, CHF against NGN for financial investments abroad.

If so a lot of Nigerians - mainly deep pockets - would sell NGN against such currencies to flee the country. The effect of this would melt down the Central Bank of Nigeria's - in fact Nigeria's - foreign currency reserves meant for importation.

One reason as to why Nigeria is lacking money for investments is that a lot of wealthy Nigerians do not trust their own country, also they do not trust their own population.

If all Nigerian owned money would be repatriated to Nigeria for developing her infrastructure as well as her domestic economy that country's wealth would boost for the benefit of a lot of people struggling for their daily square meal.
Just bluntly ask the finance minister as well as the new CBN governor.

copyright thomas ramseyer