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    THE NIGERIA - CHINA FOREX DEAL EXPLAINED


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    Much has been said and celebrated this week about the Nigeria - China Forex deal, but much is undoubtedly yet to be understood about the deal leading to all sorts of interpretations and postulations from different school of thoughts on whether we should at all be celebrating or how loud we should indeed celebrate. As it turns, and like in all other issues 'Nigerian', the school is quite a large one, with discussion participants ranging from Market Women to Economic experts all expressing their opinions even before President Buhari and his team returned to Nigeria with details of the deal. To this end, we are going to attempt to throw some more light on this issue as we see it in the proceeding write up. Please note that this is a very simplified version of the story, brought down to level of the man in the streets. Also note that the figures used here are not the exact rates, but convenient approximations for ease of calculations so as to drive the important points home.

    HOW CURRENCY EXCHANGE WORKS
    For international transaction between two countries to work, there must be a mechanism for the two different to exchange their currencies via their Central Banks to settle the transactions .e.g. if Nigeria buys 600 Chinese Yuan worth of products from China and China buys N20 worth of products from Nigeria, it means currency has to be exchanged between these two parties at an exchange rate of 20 to 600, i.e. 2 to 60 or simply put, a ratio of N1 to Y30 .
    However, there are over 200 currencies in the world today and not every country has the wherewithal to do exchange settlements with every other 199 countries at the same time, most countries just cannot afford it. America is however big enough to do this so for countries who cannot afford it the dollar now becomes the standard international exchange currency. i.e. You can exchange your currency to the US Dollar, and then the US dollar can then be converted to any currency of your choice. This is essentially what is meant when we refer to the dollar as an international Medium of exchange.There are other internationally exchangeable currencies e.g. Euro, Pound etc but they are not as convertible as the dollar.

    Before now the Chinese currency (Yuan) was not easily convertible to the Naira because both countries' Central Banks do not store their reserves in each others currency, thus the only way to transact between China and Nigeria was to first convert either currencies to the dollar. In line with this,facts recently made available showed that 70% of the Nigerian demand for the dollar was to convert eventually to the Yuan to conclude transactions between Nigeria and China. This multiple currency conversions inflates currency price due to what economics call TRANSACTIONAL COSTs .e.g. The bank has to make profit,the Nigerian selling to the black marketers has to make profit and also the black market sellers have to make their profit. This is further complicated by demand,supply and availability issues, adding to the cost of exchange rate.

    THE ADVANTAGE OF THE NEW DEAL
    With this recent agreement between Nigeria and China, the Chinese currency and Nigerian currencies are now directly inter-convertible via their central banks, meaning Nigeria will make Naira available to the Chinese central bank and vice versa. This will enable Nigeria and Chinese business men and women trade together easily knowing their governments will settle the transaction using the prevailing exchange rate. Thanks to this , the cost of converting from the naira to the yuan will no longer be impacted by transactional cost of passing through an intermediary currency - the dollar. This means that it will now be cheaper to convert from naira to yuan.
    For example, prices listed on a popular Chinese trading portal, which quotes the price of goods in both yuan and US dollar, shows a particular leather Handbag quoted as 297yuan or 46dollars, this shows that the dollar exchanges for about 6.5 yuan. Therefore, a Nigerian who wants to buy this bag now has the option to pay in dollars or pay in yuan with varying consequences as follows;


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    BET9JA AN UNUSUAL WAY TO MAKE MONEY

    by AG | Sep 13,2016

    Bet9ja

    Bet9ja is a household name in sports betting in Nigeria. It is a bookmarker company that offers varieties of sport betting activities including football, basketball, horse race, cricket, among others. Founded in Nigeria in 2013, when sports betting was beginning to gain ground among Nigerian Youths serving as a source of income for the unemployed youths.

    Bet9ja

    Bet9ja is operated by KC gaming Networks limited, with Kunle Soname as chairman and Ayo Ojuroye as the CEO.

    Bet9ja operates in almost all the state of the country, where sports betting is allowed, having its headquarters in Lagos Nigeria, the hub of business activities in the country.

    Bet9ija came at a time the Nigerian masses were just watching football for fun, arguing about the game. In a bid to assist the youth in an alternative source of income, Bet9ja kicked off, following  the footstep of MerryBet and NairaBet, by obtaining a license  for sports betting with the sum of N10M as the fee.

    With its principal operation in Lagos State, Bet9aja started with its offline betting, where agents open shops, the company supplies the Betting software to the agent who might have shown interest by applying and depositing some amount of money.

    Bet9ja online/offline

    In its offline shops, the agent is saddled with the responsibility of updating the games that are available for the day, then punters write the codes of the game they want to play with a minimum amount of N100.

    With over 99 million Nigerians online, Bet9ja decided to go online in late 2013 where it gives customer more flexibility in punting and a variety of punting option.

    First the user has to register with correct details especially those that are contained in their IDs, then the user funds his account, through various means like the ATM, in-bank, Quick teller among other method.

    After a successful registration, the user will then be able to place bets, choosing from a variety of options available. Bet9ja uses the European/decimal odd, which divides the chances of winning by 100 to the percentage of loosing and converts it to decimal. which means the higher the odd, the lower the chances of winning.

    For each winning, the user can then easily receive the total amount won directly in his Bank account. Bet9ja has always been known for its prompt payment which has made it one of the leading sports betting company in the country.

    It is estimated that in May 2016, Nigerians spent over N2bn daily on sports betting.

    Bet9ja is the current sponsor of the Nigeria Women Football League.

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