Has The Naira Devaluation Returned?



For the last few months the the Nigerian currency (i.e Naira) has been gradually gaining value against one of the strongest currencies in the world and the universal medium of international transaction, which is the USA dollar but it was not always so. 

The year 2004 began with one ($1) dollar equal to about one thousand four hundred (#1400) Naira. Although there was no substantial justification for this and it was evident that it was a manipulative move by the bank owners and their bureau de change partners to exploit loop holes in the financial policy of the country to line their pockets, the devaluation of the Naira steadily continued until one ($1) dollar was equivalent to  one thousand eight hindered (#1800) Naira. This was when the Nigerian government finally took a stand, publicly pronounced this as a gross injustice to the Nigerian citizens feeling the brunt of the intense devaluation and took economic steps to restore the Naira to the actual value. The move by the Nigerian government worked and the rates dropped from the previous value to one ($1) dollar equal to one thousand (#1000) Naira with predictions that it might even go lower[1]. This was met with country wide appreciation and celebration as the turn-around happened in a short time and the advantage was immediately felt by the citizens.

It would seem that celebration was premature as barely a month afterwards and the dollar is again unavailable at the banks and as a result customers who need it for international purchase, school fees etc. can only get it through the black market. The bureau de change agents are aware of this and are exploiting the situation by hoarding the dollar and this is again weakening the Naira leading to the rates dropping to early year values of one ($1) dollar to one thousand three hundred (#1300) Naira. Observing this, one has to ask if the devaluation is back in full force and if the previous improvements was mainly a ploy before raising the rates back to the peak values, perhaps even exceeding it. This is a bad follow up as even the International Monetary Funds (IMF) warning that the Nigeria's exchange rate may depreciate further by about 35 percent this year and contribute to a sharp rise in inflation[2]

As the bible says in Galatians 6:9 KJV - "And let us not be weary in well doing...". The Nigerian government should not relent on it's oars but should be vigilant and judiciously guard their currency rate gains by working harder for it citizens on the revaluation of the Naira. The bank owners and bureau de change agents should not be given carte blanche but should be monitored and penalized when they engage in practices that are adverse to the financial policy of the country and the citizens at large.


References

[1]

Legit.ng, ""One Dollar Will Be N967": Man Predicts Fall in Exchange Rate Soon, Naira to Gain Against" Israel Usulor, 02 23 2024. [Online]. Available: https://www.legit.ng/people/1580287-1-dollar-n967-april-man-predicts-fall-exchange-rate-prediction-viral/. [Accessed 04 24 2023].

[2]

Arise News, "IMF Warns Naira May Experience Further 35% Depreciation in 2024 Due to Nigeria’s Production Challenges" James Emejo, 02 21 2024. [Online]. Available: https://www.arise.tv/imf-warns-naira-may-experience-further-35-depreciation-in-2024-due-to-local-production-challenges. [Accessed 04 24 2023].






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