The Naira has failed to appreciate as the United States dollar sells for N500+ with traders and experts calling on the federal government to take urgent actions in saving the economy from total collapse.
As the prices of crude oil keep rising in the international market, there were expectations that the naira will appreciate, but Nigeria's foreign exchange (forex) reserve continued to trend downwards.
Prices of basic necessities including drugs, food, automobiles, spare parts and raw materials for industries have continued to rise with attendant negative effects on the purchasing power of the citizens.
The Brent crude is currently trading at $75.62 per barrel, a feat experts said should bring succour to Nigeria's economy.
They believe that the naira would continue to suffer until Nigeria becomes self-reliant and net exporter and radically resuscitates the oil sector for the refineries to work efficiently.
According to them, the increase in oil prices had not directly translated to improve income for the ordinary people even as importers have to cough out a lot of naira to get the dollar and other foreign currencies in order to import goods.
Daily Trust reports that the weakening of the naira became worse from May 2021, when the Central Bank of Nigeria (CBN) adopted the Nigerian Autonomous Foreign Exchange Rate (NAFEX) of N410.25 to a dollar while removing the N379/$ rate it had on its website for months.
As of Wednesday, June 30, the CBN rate only recorded a slight improvement of the naira to other currencies in exchange power. The buying rate for the dollar was N409.16; the central rate was N409.66 while the currency sold for N410.16. This was an improvement from N409.17 to a dollar as of Friday, June 25, 2021, when the dollar also sold for N410.17.
The Pound Sterling improved slightly too, as the naira strengthened from N568.74 buying rate and N570.13 on Friday to N567.46 and N568.15 on Wednesday, June 30 respectively.
The Euro recorded N488.83 and N490.03 CBN buying and selling rate on Friday to strengthen at N486.65 and N487.84 buying and selling rates yesterday.
On the parallel market, the naira exchanged between N498 and N501 to a dollar according to several Bureau De Change (BDC) operators in Abuja.
According to Aboki.com, a local BDC operating agency, as of Friday, the dollar traded for N485/N495 (buying/selling), the pound had N700/718 while the Euro was N588/605.
By Wednesday, the dollar had increased to N490 to buy; and sold for N500 at the black market, representing N10 increase in about four days. The Pound Sterling was bought for N704 and sold for N718, indicating a N4 increase while the Euro was bought for N590 and sold for N605, indicating a N2 increase.
The World Bank in its Nigeria Development Update (NDU), titled "Resilience through Reforms" released on June 15, 2021, had faulted CBN on its management of the foreign exchange (forex) regime saying it was the reason for the current crisis.
Daily Trust reports that the US dollar exchanged for around N509 at the parallel market that same day.
"The way the exchange rate was managed limited access to FX and thus adversely affected investor confidence and investment appetite," it stated.
'We're distressed'
The Group Managing Director of a technology firm, VDT Communications, Engr. Biodun Omoniyi, said the difficulty in gaining access to foreign exchange (forex) and multiple taxes, among others, affect the operations of Internet Service Providers (ISPs).
He said it was becoming increasingly difficult for operators to buy or replace damaged equipment, especially as operators import communication equipment and need forex.
"Before COVID-19, the value of naira was N360 to $1, but today it has jumped to over N500 to $1, which is now eating deep into our revenue," he said.
According to the Director General of the Lagos Chamber of Commerce and Industry (LCCI), Dr Muda Yusuf, there were two dimensions to the forex crisis.
He said that there was a sharp depreciation in the exchange rate and then the acute illiquidity in the forex market. These two variants of the crises, according to him, had taken a huge toll on businesses and the economy including the foreign exchange induced spike in prices.
