Elites including the president won’t allow Naira have a breather because they all hold their wealth in Dollar. It is against their interest to see Dollar depreciate. When we save so much money from subsidy and share it among governors, what do you think they will do with the money? They go to BDCs and black market and change the Naira to Dollar.
Two things happened that killed the Naira. First the governors flooded the money market with Naira and created surplus that weakened the Naira. Second they held the Dollar they changed thereby creating the scarcity that made the Dollar strong.
Meanwhile the dysfunctional structure of the economy does not support Naira’s market rebound. We only export crude oil which is not even enough to earn huge foreign reserve that will serve as buffer to the Naira. And the federal government is not helping matters when it collected custom duty, NIMASA, NPA and FAAN charges in Dollar. Importers had to look for Dollar to pay. This helped to glorify the Dollar against Naira and trigger inflation. It was a deliberate act of wickedness
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NIGERIA has the most chaotic money exchange market in the world with multiple exchange rates regimes. In Ghana only licenced BDCs sell Dollar and all buying and selling are limited to $10,000 only. The rate is fixed by central bank via automation and is passed to all BDC points at regular intervals. That way,even as Cedi depreciated against Dollar, it was not dangerously scandalous and it remains a stable currency. A dollar exchanges Cedi for 12.81 and is stable with little variations for several months. Not so with naira that lost 50% value from May 2023 to January 2024 and is not only losing value rapidly, but is dangerously unstable and pushing the economy to currency crisis.
There are lots of job to be done to rescue the Naira and the economy. First is to immediately do away with the floating systems and fix the Naira. Second is to harmonise the exchange rate and restrict Dollar sales exceeding $10,000 at BDCs except through banks. Black markets must be abolished entirely while BDCs must be allowed to operate and be strictly regulated.
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