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Why Cant Nigeria Just Print Enough Naira Notes To Get Us Out Of Recession? See The Reason Why

Austine Dklef
21 Jan, 2017 In General8 Comments , leave one
Why Cant Nigeria Just Print Enough Naira Notes To Get Us Out Of Recession? See The Reason Why
I have heared people ask this particular question couple of times. I believe this thought might have crossed your mind ever since Nigeria's economy started retrograding.

Well, while it might seem a very easy thing to do, there is a huge repercussion that follows should Nigeria or any country in general, decides to overwhelmingly print money for the sake of its economic woes.

First of all, a country can print any amount of money they want. The main reason why countries wouldn't print huge money is 'Inflation'.

1. Lets take an African country as the guinea pig here -- Zimbabwe was called Rhodesia and It was the richest nation in Africa until 1980, when Robert Mugabe was elected as the Prime Minister of the country.

Zimbabwe's GDP was 10% and 20% in 1980 but it practically plummeted to just 2.6% from 1982-1989 when Mugabe decided to print a whole lot of currency notes thinking that would solve their problems.

A Zimbabwean selling stuff; see the prices of goods in Zimbabwe currency. Some of which would cost less than a few naira notes.

Why Cant Nigeria Just Print Enough Naira Notes To Get Us Out Of Recession? See The Reason Why

That single act was what contributed the crash in economic growth of Zimbabwe. Their reduction in GDP was disastrous!

2. Germany did thesame thing during the world war II. They were having a huge debt as at that time and Its government thought of printing more money in order to offset Its debts; this created a serious crisis and left them with no option but to burn all the notes.

Now what does inflation

mean?

Inflation is simply a rise in the cost of goods and services. This means, If nigeria ever decides to print huge amount of naira notes to circulate to Nigerians, the aftermath effect would be worst off than the situation we currently are facing. What will happen is;

3. Everybody will have emough cash to spend; The man in Anambra who was growing crops to make money will stop doing it because he now has money. The Danfo driver in Lagos who was conveying people to their various work places will stop because he has enough money now. Likewise the tomato seller in Kano and so on.

Nobody will see the need in waking up at 4am every morning to face all that traffic in Nigerian roads when going to work. We will all stop work and this would be very disastrous to the country's economy.

4. The people who had been saving up until now would be made to look like they've just wasted their time. Because when money had circulated the country, prices of goods will become high and the value of those saved notes wouldn't be of any importance any longer.

5. Another crucial aspect is, Nigeria has to be given permission by the International Monetary Fund who is a regulatory body presiding over issues such as this.

Before Nigeria is given permission by IMF to print it's own local currency in the quantity they need, they need to supply something to the global market. That is --Something valuable, like crude or gold, something the global market will buy. This is the only time a country will be permitted to print their own local currency in the amount worth which has been supplied to the global market.

So if they supplied crude to the value of 2billion dollars, IMF will give Nigeria the permission to print naira worth the equivalent of 2billion dollars.

I hope this has cleared the air now? Leave us a comment on what you think.

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Recent Replies (8)

8
Me self I don't get it why did we get our independence then - ogordavid2016@gmail.com
7
@Cherish.. That your comment has to be the most dumbest comment online so far.. Mumu tribal bigot - Owo blow guy
6
Good, but the International monetary fund doesnt have full control over the country. The can decide to print cash without export goods into the global market. Nigeria can not print naira notes and it is simple; they know the repercussion which is inflation like you rightly stated - Yayah Jameh
5
Cant the country continue printing money regardless of inflation? I'm not understanding - Omah fineboy raymond
4
Nice and imformative. The CBN woudn't consider this and yes, the repercussions are dangerous - Ogunye Oluwatobi
3
hahahaha.... See 15million ontop pepper... LOL - Fulani herdsman
2
I have not thought of all these things ooh... Thanks 9jaspot, you rock... SMH for the tribal bigot below sha - cynthia ogonye
1
Very informative... Where are all those afonjas when men where men? Tfu brown roof - Cherish
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