• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Markets Currencies

Analysis: Export but build infrastructure

Kalu Aja by Kalu Aja
November 14, 2023
in Currencies, Economy, Op-Eds, Opinions
Mexican currency

Image credit: Bloomberg

Share on FacebookShare on TwitterShare on Linkedin

Mexico has a problem: The Peso is getting stronger; according to the Los Angeles Times, the Mexican Peso is up 18% against the dollar in the 12 months ending September 2023.

It is a problem for Mexicans because Mexico is the second-highest receiver of $ remittances after India. According to the World Bank, remittances to Mexico have doubled to a record $58.5b, making it a whopping 4.32% of Mexico’s GDP.

Thus, a strong Peso means Mexicans abroad must increase the volume of $ remittances to Mexico. The President of Mexico has called the strong Peso the “Mexican Miracle.”

RelatedStories

Netflix,NFL

Netflix to invest $1billion in Mexico after Nollywood funding cutback 

February 20, 2025
Crypto trading volume declined by 21.8% in June marking third month of decline

Crypto markets rebound as Trump pauses proposed tariffs on Canada and Mexico 

February 4, 2025

The Mexican Peso is getting stronger because the Mexican economy is getting more robust due to solid manufacturing growth in Mexico.

This manufacturing growth has been driven by onshoring, essential American firms bringing their supply chain close to America from Asia, and Asian manufacturers seeking to take advantage of Mexico’s closeness to the largest market in the world, America.

What are the currency dynamics?

The Mexican Peso has been free floated since 1994, and every currency exchange value reacts to the local economy; more local manufacturing and jobs are creating demand for the Mexican Peso to fund imports FROM Mexico.

The other downside of the “Mexican miracle” is that exports from Mexico have become more expensive and thus struggle to compete with Asian exports.

A strong Peso also make imports to Mexico cheaper and exports more expensive, meaning Mexicans can afford more imports and Mexican exports become costly.

Lessons?

The Nigerian economy must attract export orders and earnings by becoming a low-cost global supplier. To become an exporting nation means the economy must build infrastructure, become productive, and create local jobs built around exporting.

A model already exists: the Chinese “leased” their coasts to foreigners to build factories to manufacture and “import” into China.

Ethiopia has adopted this model; the government has constructed about ten huge industrial parks nationwide.

These parks have all the infrastructure necessary for manufacturing, including immigration, plus logistical connections to ports for export.

Notable incentives include a total exemption from customs duty for spare parts and exporters. Manufacturers who export 80% of their products can also be entitled to additional years of income tax exemption.

Just like China, Mexico and Ethiopia have built a local economy that creates jobs around local manufacturing and exports of finished goods, earning foreign currency for their nations.

In Nigeria’s case, if there is no cheap local power supply, how do local companies export cheaper than China? Or Ethiopia?

Nigeria must decide what economic direction it wants to take. Still, any decision will be built on the back of a functional infrastructure and policies that can support local job creation. Stop focusing on the exchange rate and fix the infrastructure.

But exports need infrastructure


Follow us for Breaking News and Market Intelligence.
Tags: MexicoPeso
Kalu Aja

Kalu Aja

Kalu is a Certified Financial Education Instructor and astute professional with extensive experience in capital market operations, Treasury, investment, asset management, and occupational pension services.

Related Posts

Netflix,NFL
Business News

Netflix to invest $1billion in Mexico after Nollywood funding cutback 

February 20, 2025
Crypto trading volume declined by 21.8% in June marking third month of decline
Cryptos

Crypto markets rebound as Trump pauses proposed tariffs on Canada and Mexico 

February 4, 2025
Donald Trump ‘elected’ United States’ 47th President  
Economy

US pauses tariffs on Mexico as Sheinbaum, Trump reach border security deal

February 3, 2025
U.S. to lift Canada, Mexico land border restrictions in November for vaccinated visitors
Socio Economic

U.S. to lift Canada, Mexico land border restrictions in November for vaccinated visitors

October 13, 2021
ripple cryptocurrency, XRP
Cryptos

Ripple’s money transfer network available in Nigeria

October 11, 2020
Crude oil prices, bonny light, 4 key reasons why Brent crude might slip back to $35 per barrel, Crude oil prices resume weekly gains as demand picks up 
Business News

Why is Nigeria not hedging its crude oil like Mexico?

April 14, 2020
Next Post
Rentease

Rentease sets a new standard in Nigerian Real Estate with its market launch

Comments 1

  1. CJI says:
    November 15, 2023 at 5:34 pm

    Good article, I support the drift. But I would add that Nigeria has begun the journey Mexico, China and Ethiopia started. We always need to balance the narrative so that we dont miss out on whats already unfolding. How?

    – Lekki seaport has doubled sea port capacity. IE Lekki alone is bigger than Apapa + Warri + Onne + Calabar combined. It makes Nigeria a trashipment port.
    – New Trains to Itakpe, Kaduna, Ibadan, Abeokuta, Kaduna and Kano (And Aba) = Access to Nigeria’s industrial hubs.

    – Escravos II gas pipleline from Niger delta to Lagos and Ogun doubling gas supply to industrial centres in the South West. This has already been done and operational.
    – AKK pipeline from Nigeri delta to Kogi, Abuja, Kaduna and kano- to take power to Northern hubs. This is coming in December

    – Refining capacity x 3 of the national consumption almost in place.
    – 18,000 MW of power (according to PwC research) which includes TCN and non TCN connected power (Eg gas, solar, etc).

    The early budding results:
    almost 400% increase in Non oil exports from 1.1 billion to over 5 billion. Imagine another 400% and another 400% by 2040.

    Over 1,000 Asian manufacturing companies have moved to Nigeria from China and India (According to Financial times). Lekki has over 200 of these companies.

    These and much more indicate that Nigeria’s journey to productivity began. The pains are still plenty because it is a budding phase, but in agreement to your article, let’s take our eyes of exchange rate, put our heads down and build.

    Actually if we go back thirty years to India, China etc we will see similar, painful years, era of poor quality and ineffeiciency, etc. But they stayed focused and reap today.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Emple
nlng
first bank
Zenth Bank








DUNS

Recent News

  • Onga ignites African culture and storytelling at AMVCA 2025 Culture Day with festival of flavours 
  • Anambra Govt acquires land in Aguata, Orumba for new industrial city 
  • US-based Nigerian archaeologist Abidemi Babalola wins $300,000 Dan David Prize  

Follow us on social media:

Recent News

Onga ignites African culture and storytelling at AMVCA 2025 Culture Day with festival of flavours 

Onga ignites African culture and storytelling at AMVCA 2025 Culture Day with festival of flavours 

June 12, 2025
UNDP partners with Anambra State to establish Innovation Makerspace 

Anambra Govt acquires land in Aguata, Orumba for new industrial city 

June 12, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics