The fall of Nigeria economy with Naira depreciation
Nigeria, the African giant, is a term heard from every Nigerian's lips, and I wonder whether it is truly what we represent as a nation. There was a time when Nigerians were honoured, revered, and widely known across the world when they were visited or heard in another part of West Africa's countryside, but does it still apply today? No, I don't think so.
Let's start with our country's currency valuation in comparison to other neighbouring countries. As of writing this post, the official price of NGN to dollars is around N412 which, according to the CBN, has been our rate for the past 5 months, but when compared to our neighbours like Ghana, that's equivalent to 6C, 14.76 Ryan in Kenya, and 110.27 shillings in South Africa, which begs the question, are we still the Giant of Africa as we used to claim in the past.
Nigeria has been in a state of emergency since the first day the naira was formally proclaimed as our nation's currency, it has been depreciating day by day, monthly and yearly, and I am concerned about the future of my beloved country. CBN is battling various businesses, from banning Bureau De Change to Aboki Fx, while knowing full well that those components were part of the problem, but importantly, they are small in the grand scheme of dollar depreciation.
We are fighting insignificant problems that generate little or no value in our dear currency, the CBN is fully aware of this; however, you know how an office man tries to pursue a chip political ambition when they try so hard to get things right and it doesn't work, they do things that will get the public's attention to give them that unwarranted applaud for retards' work done.
There are numerous factors that have contributed to the naira's depreciation; the country is aware of this, ranging from the political Godfather, the federal Parliament, down to local government, who are fully aware of the problems but would rather close their eyes and turn a blind eye than address them, despite statistical analysis and reports that are published on a daily basis. We have failed to confront this issue because many people are frightened, but I will emphasize it regardless of the outcome and we need to solve the issues if the future is to be brighter.
Inflation
Inflation is a worldwide issue, but it doesn't imply Nigeria was created by the British to suffer at the hands of the government. Every week, data metrics reveals that Nigeria's purchasing power is deteriorating, leaving you to wonder about the country's future.
Nigeria's inflation has never been as lower as the minimum, owing to our reliance on oil, and when the price of oil falls, we face the consequences, which are disastrous for the country. It is extremely dangerous for a country to rely solely on one source of revenue, oil has been our only hope, and if the international oil market falls, we suffer as a result.
According to statistics obtained from nairametrics.com, there is a 1% monthly increase in Nigerian inflation, which began as a result of the economy being shut down during the Covid 19 lockdown. There were many factors that contribute to this, such as a lack of food supply, government economic policy, and increases in wages and salaries, but has the salary ever been able to solve an average Nigerian meal? The last time I checked, it was still less than $100, which is incredibly cheap for a citizen. The momentum never ceased until last month August, when Nigeria celebrated a 1% drop in inflation. Is this worth celebrating in the media and on national television?
Nigeria experienced deflation for the first time as a result of an economic correction that lasted only a year, between 1999 and 2000, when we had the first democratic election, and the moment he resumed the office of the presidency, the inflation resumed, and it has never gone below the minimum in Nigerian history, indicating that something has gone very wrong because we lost to the system.
What happens when a country eliminates its sole supply of dollars, knowing that its citizens are so reliant on imports and that there is a significant lack of dollars in its foreign exchange?
Of course, they will look for alternatives, which is exactly what every citizen is doing, and this has resulted in the devaluation of the Nigerian naira, forcing everyone to buy dollars at a 39% premium, they have been wailing instead of working, they have stopped bureau de change and confiscated so many accounts and halts previously registered accounts, is this the way forward for this country?
It's sort of weird when I was listening to the CBN accusing Aboki Fx of naira manipulation while the creator was in London benefiting from the data made public, but is it even true?
The last time I checked, Aboki Fx merely collected data from several exchanges and calculated the average purchase value of the naira on the parallel market; they don't give an avenue for trading or anything like that, but they were labelled for the naira's depreciation. They had to take down the website data and examine further because the central bank was threatening them, but I have not noticed an increase in the value of the naira since they updated it on their websites, so the Central Bank has to focus on the real issue and stop chasing clout.
Will the naira's depreciation end soon? Hopefully, if circumstances improve, the naira will gain in value, but it's just difficult to forecast. I was trying to obtain a future view of the image of the dollar to naira by using the model below, but since it's not a static analysis like bitcoin, it could be any of the ways. We may end up by 700/$ in 2022 and 1k/$ by 2023 when we have a change in the government. This I have seen
The country is becoming hard for an average man, may
God we protect the nation ourselves.
Una Happy Sunday my People.
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