The sound of the waves, crashing
I had an interesting experience today.
I went into a shop in Maitama. We got there just before 11 (opening time). We were let in anyway. The guy who manages the joint was inside, not looking like a happy chappy. I asked him if we could buy some things. He said, 'go ahead, although I might close in a bit and double all my prices. The naira has gone up to 190 against the dollar. I am losing money on everything.'
Imagine that - a shop closing to double all prices. It may not be the end of the story, as the rumour around town is that the naira will depreciate still further, to 200 or even beyond. What inflationary effects on the Nigerian economy this has, who can tell, still less the effects the crash will have on society. Removing the fuel subsidy (which is on the cards), in the context of an economy which imports 90% of its petrol, may spell even tougher times ahead. Imagine if the price of fuel was to double..
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3 comments:
Nigerian stock market is too heavily dependent on the money market of UK, USA, China and Middle East. Naira will depreciate still further, past 200 to the dollar. I knew this since 2007. U see, Dec 2008, I was told off by friends in the banking sector in Naija for not pumping money into stocks in Nigeria. They all said they were making large profits. They were, but they were not investing intelligently; like sheep, they were following one another and investing in new media and fmcg. In bad economic times those industries, luxuries and banking industry suffer the most. I warned them about the impending stock market crash. No one listened, even my younger ones. Everyone I know in Naija was seriously burnt in this recession. Things will get worst. It will take 3 years before UK economy will come out of this mess. It will take Naija 5 yrs to come out of it. Businesses will offload their costs to consumers. Taxes will go up in UK and Nigeria. Many uk and naija entrepreneurs will register their companies in Jersey, Isle of Man, Cayman Island, and other offshore tax havens to avoid the impending increase in corporation tax. Remember 1st Gulf War? Remember 2nd Gulf War. If you see UK or America at war with any country on the planet and it involves oil, invest wisely; rental properties - not stock market. How to survive a recession? Cut back on everything – go for cheapest alternatives and spend on only what u need to survive. Recession will always happen once every ten years. This recession is a good thing if you know how to use it or if you are in auctions / repossession / insolvency industry for big-ticket items. This recession will get most people focused at what is most important - realigned to shine brighter once the storm is over. I predict the next recession will be 7 yrs from hence but it will not be as bad as this. Right now, there is no recession.
Secret diary. You have just addressed one of my biggest worries. I need a plan to survive this recession. I am very worried even though I have a 'good' job. I'm going over to your blog to see if you have an e-mail address.
Jeremy, is there any one else you know that can offer me advice on this? I have nothing but common-sense knowledge about economics and do not see how that can tide me over in this recession.
Thanks for this post. I was wondering why no-one had touched upon it. In fact, I started typing up a post yesterday about it.
SECRET DIARY, your post is very informative and factual, thank you for posting. I too need to investigate how to make the most out of a little.
In my head and around me, I'm taking the same path as you. It's time to know more about owo!
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