Again, Nigeria’s foreign exchange has broken another jinx, on the poor side as the naira falls to an all-time low against the US dollar at the official rate as $1 traded at NGN422.07 at the close of trading.
When the Nigerian currency’s depreciation at the black market rate continued some weeks back, the apex bank’s governor Godwin Emefiele first blamed the Bureau De Change (BDC) operators for sharp practices.
But when the stoppage of sales of forex to the BDCs further worsened the situation, the apex bank blamed abokifx founder Oniwinde Adedotun for manipulating the rate, using the large following of the platform, yet nothing changed.
At the time, Oniwinde taunted Emefiele, saying he would deactivate the forex rates on his platform, “if that would make the naira to regain its value”
At the time of filing this report, $1 was NGNG575 at the black market in Lagos, NGN570 in some parts of Ibadan, Oyo State capital.
While everyone thought the measures by the CBN would make a significant impact, rather the naira continues to lose value both at the official and parallel market.
The official trading rate on the CBN website was NGN410.91/$1 (selling) and NGN409.91/$1 (buying) at the time of this report.
But rather for the rate at the Investor & Exporter foreign exchange window to gain, it depreciated from NGN413.15/$1 to 422.07/$1. It is the worst rate in the history of Nigeria at the Investor & Exporter foreign exchange window.
What’s the cause?
Emefiele may not have direct control over the regulation of the foreign exchange market because it seems he has lost his regulatory powers to the political class, a financial analyst who doesn’t want to be named said.
“You can never get the economy right when you spend most of your earning to finance debt, spend almost halve of your forex on fuel importation, and you are unable to restore peace in most part of the country.
“Nigeria’s economy isn’t productive, the indices that could make it productive have been eroded by the state of insecurity across the county. Most farmers in the North can’t go to farm,” he told InfomediaNG Business Solutions on phone.
On October 14, 2021, the CBN governor revealed that 40 percent of Nigeria’s forex is spent on the importation of refined petroleum products.
And in one of our reports, we highlighted some of the implications of spending 40% of forex to import what Nigeria can produce.
For instance, in the month of August 2021, Nigeria spent $103.70m (more than NGN42billion)for fuel importation.
The refineries in the country remain ineffective while the government continues to allocate several millions of US Dollars for their maintenance in the yearly budget.