A short case of Nigeria and the Naira

By the time of Nigeria’s independence, the economy of the country seemed promising and bright, being the giant of Africa with up to 15% of its population and lots of natural resources; It was expected of Nigeria to have a stable economy but that never became the fate of Nigeria even till date. From 1986 till date, the Naira began its unfortunate struggle yet interesting relationship of falls and rises with the Dollar.

In the early 70s and 80s, before 1986 when Ibrahim Babangida had to accept SFEM to manage the mess Nigeria found itself, the Naira exchange was like 55kobo\90kobo to 1$. By the time IBB left the office after ruling for 8 years the Naira had moved to 17naira to 1$, in 1993.

The rate at which the Naira continued to depreciate is not a surprise for a country that did not save in good days. When Sani Abacha took over power till he died in June 1998, the exchange rate did not go above 22 Naira to 1$. Although this was the official rate, at the black market it was sold up to 84 Naira to 1$ in 1998. His successor, Alhaji Abubakar was able to keep the Naira stable at 21 Naira and sold at 90 Naira on the black market. This did not last very long after Olusegun Obasanjo took over the seat as Head of State. At this point, many Nigerians had forgotten the good old days and the ideal low cost of living.

From 1999 to 2004, the official exchange rate was 85Naira sold at 105Naira. By 2004 when the price of oil rose from 30$ per barrel till it peaked to 140$ in the middle of 2008, the Naira was able to suffice between N99 to its lowest N128 in 2006. It got better in 2008 at N115 to 1$.

Naira had become 300 to 1$ in 2016 and from then till now, it has gotten worse. Since the reign of Mohammed Buhari, the Naira has received more pressure than before based on issues like the plunging of crude oil which constitutes Nigeria's major exportation. Due to COVID-19, widespread corruption and low global oil demand, Nigeria economy is experiencing paralysis.

The Naira had been devalued and closed low at about N389. The has affected the cost of everything and the standard of living has gotten lower and worse than ever.

Ever since the discovery of crude oil and the shift from agriculture as the major sources of foreign exchange, the Nigeria Naira has only depreciated. These alongside excessive importation of almost everything by Nigerians led to scarcity of the dollar and Nigeria has lost its old good days.

Now that crude oil can obviously not save the economy as it used to before; can we ever return to the days when the Naira was more powerful than the dollar?


Article compiled by FCMgist (leading media brand based in Ogun State)
FCMgist on Facebook and Instagram
FCMglobal on Twitter

Lalasticlala, mynd44 , Seun

isoright

Pray you don't be like Nigeria at 60.

Lalasticlala