More from @FinPlanKaluAja1

Oct 3

Why is the Naira Gaining

If you exchanged your Naira for USD in 2015 and held it until September 2025, that $1, when converted back to Naira, would be worth about 644.14% more.

However, the exchange value of the Naira has depreciated over the years as inflation has eroded its ability to serve as a reliable store of value.

If you exchanged your Naira for USD in September 2024 and held it, the $1, when converted back to Naira, would be worth 11.12% less. The Naira has strengthened

So, the question naturally is Why has the Naira gained strength? And what can sustain its strength?

First, an introduction to currencies

A currency note represents a legal means to trade in goods and services. If I want to buy a luxury flat in Nairobi, I need Kenyan shillings or US Dollars. I can pay with US dollars because the US is the global settlement currency. Similarly, if Kenya’s want Nollywood movies, they will need Naira or US dollars.

Thus, if I am in Nigeria and buy Kenyan goods, the value of the Kenyan shilling will rise, and the value of the Naira will fall.

What Made the Naira Lose 644% in 10 years?

In 2023, the Central Bank of Nigeria’s Governor, Yemi Cardoso, during a presentation to the House of Representatives, disclosed that oil revenues had declined from $ 93.89 billion in 2011 to $31.4 billion in 2020. Meanwhile, foreign education expenses between 2010 and 2020 grew to $28.6 billion, and foreign healthcare expenses rose to $11.01 billion during the same period.

The naira thus lost value because of the simultaneous decrease in the supply of dollars from crude oil sales and the increase in demand for dollars. The CBN Governor listed the following as key demand drivers for foreign currency in Nigeria

1. Schooling abroad 2. medial tourism 3. food imports

Read 8 tweets

Jul 26

Currency notes issued by the Nigerian Government.

Look closely, the Nigerian pound has “promise to pay on demand one pound” What does that mean? The note says One Pound already, so what is being promised?

Let’s talk about money.

The paper you have in your wallet is Money... It’s not actually “money”.

Money is the gold, silver, or assets held by the Central Bank or nation that issues the currency. A Naira note is simply the Central Bank of Nigeria saying, “if you give us gold, we give you Naira” and “if you give us our Naira, we will give you back gold”.

Same for the US Dollar.

The US Treasury is saying, “Give us gold and we give you paper ...called dollars.”

So Currencies are bonds. Instead of trading with your gold, you now trade with Central Bank paper.

Again, look at the US Dollar today, there is no promise to repay your gold. Hmmm

Read 9 tweets

Jul 22

Household Consumption in Nigeria Has Declined

The alarming drop in consumption rates in Nigeria is not discussed enough. According to a report by the Nigerian Bureau of Statistics titled “Nigerian Gross Domestic Product Report (Expenditure and Income Approach) (Q1, Q2 2024),” published in July 2025, the data reveals a troubling trend: real household consumption expenditure has been declining since Q3 of 2023. Specifically, household consumption expenditure fell by -42.28% in Q1 2024 and -61.18% in Q2 2024, reflecting lower rates compared to the same quarters in 2023. On a quarter-on-quarter basis, real household consumption expenditure decreased by 45.71% in Q1 2024 and plummeted by 99.24% in Q2 2024.

These figures are difficult to digest.

This sharp decline in consumption is one reason why many foreign multinationals are exiting Nigeria; Nigerians today struggle to afford anything priced in dollars, including imported PMS (Premium Motor Spirit).

Why Is Consumption Weak?

Consumption is weak due to stagnating wages and rising inflation. Companies are attempting to stimulate sales by repackaging 500g items into 50g sachets. This sachet economy traps consumers in a cycle of inflation, making it impossible for them to bulk buy and escape rising prices.

Read 8 tweets

Jun 22

Two points on Iran and the Strait of Hormuz

1. Crude oil accounts for about 85% of Iran’s government revenue. Iran exports approximately 90% of its oil via the Strait of Hormuz

2. China is the largest purchaser of Iranian oil. Closing the Strait of Hormuz means China gets less oil than it needs from Iran; thus, China will go elsewhere, possibly to Russia. Not smart to lose a key export market to a swing exporter

Closing the Strait of Hormuz to 90% of your oil exports is like resigning from your high-paying job so you don’t pay alimony to your ex-wife

Instead of typing one liners, do some research. You are seriously comparing the volume an oil tanker can carry with the volume a train can carry?

I asked Grok

“Approximately 90% of Iran’s oil exports are transported via sea. Iran produces around 3.2 million barrels per day (bpd) of crude oil, with about 2.6 million bpd exported. Of these exports, roughly 2.34 million bpd are shipped through maritime routes, primarily via the Strait of Hormuz from Persian Gulf terminals like Kharg Island. The remaining 10% (around 260,000 bpd) can potentially be exported via the Goreh-Jask pipeline to the Jask terminal on the Gulf of Oman, though actual usage of this route has been minimal, dropping to less than 70,000 bpd by September 2024 and ceasing thereafter. Non-maritime exports, such as via rail or land routes, are negligible for oil due to infrastructure limitations”

Slow down, do your research, then respond

You can’t compare a ship carrying oil to a train carrying oil

“A standard oil tanker, specifically a Very Large Crude Carrier (VLCC), can carry about 2 million barrels of oil (approximately 280,000 metric tons). Other common tanker types, like Aframax or Suezmax, hold 500,000 to 1 million barrels (70,000–140,000 metric tons). Tanker sizes vary, but VLCCs are widely used for long-haul maritime oil exports, such as from Iran to China.

In contrast, a standard freight train configured for oil transport, using tank cars, can carry significantly less. A typical oil train in regions like North America or Eurasia has about 70–100 tank cars, each with a capacity of 700 barrels (100,000 liters). In the China-Iran rail corridor, trains may have fewer cars (e.g., 40–70) due to infrastructure constraints like rail gauge differences or locomotive power, translating to roughly 28,000–70,000 barrels per train.”

Read 4 tweets

Apr 19

A Financial plan is a process

You go from A, to B then C

So whats Lets review the steps

1. Have a Plan

First and foremost, it’s important to define your purpose for investing or delaying consumption.

Understanding the “why” behind your decisions informs the “how” you should proceed.

For example, if you’re investing or postponing consumption today in order to spend during retirement in 20 years, your investment strategy will differ significantly from if you’re saving to consume next year.

Being clear about your goals will help you create an effective investment strategy

2. Now that you have a plan, the first step is to build an Emergency Fund.

An Emergency Fund is a savings account where you set aside three to six months’ worth of essential expenses, such as food and rent.

The process is straightforward:

1. List all your expenses and categorize them as “essential” or “non-essential.” 2. Determine the monthly cost of the non-essential items. 3. Save this amount in your emergency fund; it should be kept in cash or near-cash.

Why is this important?

If you invest without an emergency fund and an unexpected situation arises, such as a job loss or a damaged car, you may be forced to sell your investments to cover those expenses.

An emergency fund acts as your safety net.

Read 7 tweets

Apr 9

Let’s compare assets during these turbulent times.

I have picked five asset classes:

Gold, represented by GLD ETF US Stocks, represented by VTI US Property, represented by VNQ Digital Assets, represented by Bitcoin BTC US Bonds, represented by UCITS

Let’s track performance for one week, one month, a Year, and Five years.

What if I bought 5 years ago?

One word, Bitcoin. It’s not even close; BTC killed the competition, went to the moon and back.

It’s risk on, so cash rotated from bonds to stocks and, curiously, gold.

Property posted anemic returns.

About a year ago?

Markets grew slightly nervous, reducing risk-taking.

Investors shifted from high-risk BTC and stocks to gold and bonds. Gold led, followed by Bitcoin.

Stocks and property lagged.

Read 7 tweets