SEC-S15W5: "Foreign Exchange"

Hello friends, Welcome to my blog! It is the 5th week and the last day of the week. I hope my entry also contributes to the meaningful impact purpose for which this topic was designed.

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Name 3 major ways your country earns foreign exchange. Briefly explain how each method works.

My country earns its foreign exchange from a couple of channels they engage with other countries but these are some I could write briefly as required;

• By Exporting Goods and Services.

This is one of the ways every country with bilateral ties earns their foreign exchange out there. Every country has one thing they have a comparative advantage over the other counterparts and hence they earn foreign exchange from them. My country earns from. The exportation of agro-allied products and other mineral resources has earned the country so much foreign exchange over the century.

• Foreign Partnerships and Investment

This is also a good source of foreign inflow into the country. When other countries have the confidence to invest in your country due to the ease of doing business, this automatically boosts the foreign exchange inflow that comes into the country. A country with high foreign partnerships and investment also would have an increase in foreign exchange.

• Other Remittances

When I say other remittances, I mean remittances from virtual and online IT jobs, diaspora transfers/deposits, etc. The government has harnessed this channel and the values received from this have been commendable.

Which sector contributes the most to your country's foreign exchange earnings? Why?

• By Exporting Goods and Services.

The exportation of goods and services has remained one big source of foreign exchange revenue generation. Nigeria is a net exporter of crude oil and among the top producers of crude in the world. This has earned the country so much foreign exchange over time.

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Does your country's foreign reserves depend on this particular sector or are there many other sectors as alternatives?

Even though we earn more foreign exchange from crude oil, the country also has earned from the exportation of other mineral and agro-allied products. The little diversification in this channel has opened up the required expansion needed for more inflows.

We also have direct investments/partnerships and remittances. These are veritable channels the country also complements foreign exchange earnings aside from that received from exports.

What kind of problems do you think your country will face If this sector somehow collapses?

The country is already facing challenges in foreign exchange earnings. It is a compounded issue as no one knows why exactly. Direct foreign investment is observed to have dropped in their numbers due to instability in the economy and observed growth, insecurity, and political and policy instability.

The country is experiencing galloping inflation as the currency is rapidly losing its value to its foreign currency. This has impacted on the high cost of living and hunger in the land. The rate of insecurity is worsening already and all we hope for is a stronger political will to reverse the trend.

Conclusion

Foreign exchange is the bedrock of a stable economy. At all times we have to keep strengthening our demands to be favorable to the tides with supply always surpassing demands in the trade. As we know these can only be achieved by being a productive country rather than a consumptive one.

I wish to invite @onyiluvdan and @eveetim