by Dr. Mike Redford
Those who are not with us are against us. President Jonathan and PDP are against us. President Jonathan has made fundamental economic woes for Nigeria. The most recent one being the corrupt arrangement with Japanese auto industry to inflate the cost of bringing used cars into Nigeria. Used cars are means Nigerians abroad scrubbing floors of different
disgusting institutions including washing dead bodies save money to invest in Nigeria.
The fact is that these Nigerians abroad are bringing money into Nigeria thereby helping the economy to grow, and the people to benefit from their hard work abroad. President Jonathan’s government has negotiated out the contributory effects, and currency power of dollars and Euros brought to Nigerian by these people.
He did this by allowing Japanese auto giant Toyota to come into Nigerian and build auto assembling plant. What stops Nigeria from buying out auto industries that are going out of business in Europe or America as India did. India bought jaguar and another brand with that they built their auto industry.
There is a Nigerian who has started auto manufacturing at Nnewi in Anambra state. Why did not the President Jonathan’s government support his investment and help him to develop the first Nigerian auto industry? We have many expatriates companies draining Nigerian currency index and impoverishing the country.
These are seen in telecommunication, fabric materials, transportation and host of other foreign investment that do not help the country to develop. The nail industry that I spent years building out of hard work in the cold weathers of U.S was shutdown by Chinese dumping of nails into Nigerian market and by over taxed tariff for importing raw materials into Nigeria. The same thing happened to my satellite and poultry businesses which were similarly shutdown.
Japanese auto giant Toyota will drain Nigerian dollar purchase power and send Nigerian further down to poverty level. Toyota will produce fancy cars for the rich and sell them at high prices and in turn convert naira to dollars and move millions of dollars back to Japan. Toyota should not be afraid to compete with used cars brought from abroad.
It should capitalize on building cars every Nigeria can afford to buy. However, it has no vested right to deny Nigerians the alternative in choice of what they can afford to pay. Japan and Nigeria has no trade agreement and are not trading partners. Japanese auto giant Toyota invasion will put Nigeria in the trade deficit.
America can afford such trade deficit because it continues to print dollars. If Nigeria tries to print more naira it will devalue the global buying power of naira to close to nothing. This is an economic woe decision that Dr. Mike Redford being Nigerian president elect in 2015 will cancel and rescind such useless and selfish agreement.
What happens to millions of Nigerians that cannot afford to buy the Toyota fancy cars? With February hike of 70%, import duty on used cars an average Nigerian cannot afford used cars anymore. What happens to rural transportation? Can the poor people still afford to go back to their villages because with 70% hike transportation fees will go up by 70% increase. This will create massive unemployment in a country already saturated with unemployment of people of all ages.
I decided to investigate world currency indices available that set the weights of each currency equal to the relevant country weight in a corresponding MSCI Equity Index. This unique approach to weighting the currencies allows countries to understand the international worth of their currency otherwise known as purchasing power of the money outside the country. Let me throw in some economic weights to clarify why I believe in economic empowerment of Nigeria.
The Big Mac index is a guide to whether currencies are at their “correct” level. It is established on the theory of purchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalize the prices of an identical basket of goods and services (in this case, a burger) in any two countries.
It means that the Japanese auto giant Toyota will sell its cars at about $45,000 to Nigerians that are affluent, where Nigerian Naira market exchange rates is at 172Naira to a $1.
The “raw” Big Mac index says that the naira will be undervalued by 57% at that time. Simple arithmetic is 172+ 172(.57) is 270Naira per every dollar Toyota carries back to Japan. Dr. Redford says NO TO ECONOMIC SLAVERY. The relationship between prices and GDP per person may be a better guide to the current fair value of a currency.
The Broad Index of the Foreign Exchange Value of the Dollar will totally destroy Nigerian’s economy and put the country in the hole it will never come out. Stop President Jonathan’s second term by electing Dr. Mike Redford in 2015. As of today Nigerian is not in the world currency index.
The weights (total weights and weights for the import, export, and third-market competitiveness components) currently in use appear below and Nigeria is close to making the list, that is why Toyota is here to put Nigerian away. Http://www.federalreserve.gov/releases/h10/weights/