When Would Naira Gets Its Grooves Back?
Naira has been beaten down mercilessly in the foreign exchange market ring with some knockout punches but the monetary policy could not help but be sorry for the poor fortune.
In 2020, the Nigerian local currency official rate was kobo away from N359 to a United States dollar. It was not so earlier in the days when Nigeria was a country. In 1960, you need almost nothing to have a dollar.
Now, I wake up to see that I am poorer than a day before naira has been devalued overnight and the inflation rate is biting, not to mention that the street inflation figure is way ahead of the official number.
Up till 1988, Nigerians need less than N1 to obtain a dollar. But since then, Nigerian naira has been on a turbulent ride to the extent that you almost require N600 to obtain a United States dollar in recent time.
What happened? At the end of an era, to be precise, many countries dig deeper than Nigerian leaders initial thought.
In the beginning, Nigerian local currency was a king in the foreign exchange market, basically backed by agricultural produce and of course much needed crude oil and the global economy advance into industrialisation.
But while Nigerian leaders dwell on their oasis, others were thinking about how to reposition and compete favourably. It didn’t take so much time, they catch and Nigeria catch down.
It is disturbing there is no significant investment in Nigeria with oil windfall. Instead, Roll Royce and private jets for the few scatter and litre the streets.
American brings a lot while Nigeria eats a lot of imported stuff. They even squander away Nigerians commonwealth abroad.
And Bretton wood reposition the global economy, African economy technically tied to the United States dollar. The confession of an economic hit man, some think it’s fiction but it could be unlikely so.
Okay, in 1985, Nigerians need less than 90 kobo to have a dollar. It worsen in 1986 when the exchange rate hit N1.75 to a dollar. In 1987, naira saw its first-ever large depreciation to N4.01.
Currency tracking indicates that Naira face the worst pressure between 1998 and 1999, the official exchange rate moved from N22.886 to N92.3381, according to World Bank data.
Since then, trading life has not been easy for naira as the country wobbles, fumbles and is troubled.
The political class and the military combine efforts to punish the Nigerian generation due to a lack of foresight. Competition for a position without competence kill the future of the Nigerian economy.
It has not survived and is unlikely to survive by the way the Nigerian electorate cast votes. In a couple of years to come, Nigeria could rank among the most indebted nations. Total public debt nearing N40 trillion – an official figure which excludes other borrowings.
Invariably, the future has been mortgaged. Africa is the property of the creditors. It is hardly seen that Africa country is owing to another – Unlikely so because they African countries like and prefer the greenback.
It is the dollar, just like it is for imported goods that have watered the largest black race in the universe. Then, what are African countries borrowing money to do?
Some countries in the continent are owing more than their entire gross domestic product to bilateral and multilateral lenders.
And China is having commercial fun in the region –a strategic incursion into the continent due to a lack of strategic resources management and coordination.
Many African leaders are simply enemies of their respective nation: gullible! I am still asking: When would Naira get its grooves back?
Foreign interests believe, despite its worrisome state in the FX market, that naira is overvalued and they want the local currency devalued so they bring more dollars into the nation.
It is what it is with Nigeria, producing less and consuming more – a community of people with a taste for everything foreign. # When Would Naira Gets Its Grooves Back?
