Victor Moses Becomes Highest Paid Nigerian in Europe - AreaGist.com
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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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    Victor Moses Becomes Highest Paid Nigerian in Europe

    by AG | Mar 02,2017

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    Nigeria winger and Chelsea wing back, Victor Moses has inked a fresh contract to keep him at Chelsea until the summer of 2021; making him the highest paid Nigerian in Europe.

    Moses, 26, joined Chelsea Wigan Athletic in the summer of 2012; and had spent loan spells with the likes of Liverpool, Stoke City and West Ham United in recent seasons.

    Victor Moses hard work

    However, the arrival of Antonio Conte gave him the opportunity to showcase his talent as wing-back;  a position which is unfamiliar to his style of play.

    So far this season, Moses has contributed three goals and two assists; helping the Blues maintain a ten-point lead at the top; which convinced the hierarchy to reward him with an improved contract.

    Speaking on the new contract Moses said; “I feel very excited. I’m delighted to be here for another few years now and to sign a new deal. Now it’s time to concentrate on the team and keep working hard to make sure we win games and try to win the Premier League this season.”

    Victor Moses goals

    “We’re having a great season, I’m enjoying my football and we have a good manager here that has given every single one of us confidence. I just want to keep on enjoying it and working hard for the team.”

    Similarly, his fellow countryman and Chelsea’s Technical Director, Michael Emenalo told the club’s official website that; “We are extremely pleased Victor has chosen to extend his contract with us. He is enjoying an excellent season and, under Antonio’s leadership, has proved to be an important member of the squad.

    “This new contract is testament to Victor’s hard work and dedication to succeed at Chelsea, and we believe he will be a big part of our future success.”

    Moses, whose previous contract ran out in 2019, had been previously a target for Spanish giants Barcelona; who seek to add a pacey right-sided defender to their ranks.

    According to report, the new contract sees Moses go from £45,000 a week, to £75,000 a week.

     

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