Warning: The Naira Is Crashing

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In just one year, the Naira has dropped 1.5 times more in value than it did in the previous 8 years combined! That my friend is quite scary. The Naira is basically falling faster than pure water sachets at an NYSC camp.

Naira Value 2

And I know, people are going to point to the fact that the CBN rate is holding firm at N200 and claim it as a positive development in our economic turmoil.

But as I mentioned in my previous article This Is Economics Not Politics that rate is largely artificial and ultimately unsustainable (unless in the unlikely case that the price of Oil suddenly rises in 2016).

Historically, the CBN rate is slightly lower than the Free Market rate with a gap of a few hundred kobo. However, in the last 12 months we have seen an increasingly worrying trend, where the CBN rate deviates away from the Free Market rate by a huge gap.

To understand this better, the average CBN/Free Market rate difference between the years of 2006 and 2014 was just N4.00. But in the year 2015 only, that difference is a staggering N81.00. This is 20 times the average of the entire past decade! Think about that.

Naira Value

When you see a trend like this, it will tell you that our Economy is basically running on fumes, we don’t have enough currently to sustain the CBN rate. And banks are already beginning to reflect this. For example, Diamond Bank today announced to its customers that they will no longer be able to use their Naira Debit cards in Dubai, China and other African countries. In their own words:

“Due to the current FX market realities, please be informed that your Naira Debit Card has been restricted for usage in UAE, China and African countries.”

So yes although we have N200 on paper, it is not N200 in reality.

So who do we blame?

Frankly, I don’t care. I don’t want to enter in yet another political battle that solves nothing.

What I am trying to do with this article is to tell people whether they support PDP, APC or even KOWA that our Economy is in a state of emergency. I am begging Nigerians to pull themselves out of party propaganda, finger-pointing and all the normal bullshit and instead pull-out their calculators and start computing the impending doom.

When we accept that there is an impending doom, then we would have the tools to start asking the right questions from our Government to prevent it. Questions like … “What is the new Finance Minister economic strategy?” “What is the plan to generate revenue when Oil is falling so fast” “What is our jobs strategy” “How are we going to attract foreign investors?” we need to start talking now before it is too late.

Sadly, we are too quiet. The media is quiet, the citizens are quiet, absolute silence … no one is asking questions and that worries me …

twitterWritten by Okechukwu Ofili of ofilispeaks.com
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Author: Ofili

Words by Okechukwu Ofili of ofilispeaks.com
Follow him on Twitter
Stalk him on Instagram
Read his crazy titled books on konga or okadabooks
Feed his children at…no wait he has no kids…. 

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12 comments on “Warning: The Naira Is Crashing

  1. Citizen of naija on said:

    Ofili.It’s called inertia. I am so weary. That is what is wrong. The press need to feed. I did a transfer and realised my bank charged me 250 naira to a dollar. We can all see the impending doom but seem powerless.
    The Govt in power is dealing with only corruption. That is their only thematic theme. Only policy thrust. The NSE is sunk.
    I am weary I.repeat.
    I will withdraw my money in dollars and keep until the storm is over.

    PS. Nigerians are waiting for a miracle. They chased the only good thing they had. Ngozi Iweala and are praying that by an act of God, someone knowledgeabe will steer the economy out of this quagmire.

    Keep reminding us

  2. Nice piece, Mr. ofili. The media and Nigerians are quiet on the state of our economy and focused on some political bullshits. Maybe we should start a conversation on social media with the hashtag #thefutureofNigerianeconomy

    • Omotoyosi on said:

      I am totally in support of the hashtag. Funny thing is, I made an exact post like this on my FB yesterday.
      The average Nigerian has no idea what this means. They receive messages from their bank and just ignore.

      The situation would be worse in 2016. I am completely gobsmacked that a country like Nigeria does not have any form of foreign reserve for situations like this.
      We are not generating enough naira to exchange into pounds and dollars for those that needs it.

      The write up from CBN governor this morning does not make me feel any better. If we continue at this rate, the level of unemployment would reach its peak by late 2016.

  3. Yes. I’m sure we’re mostly tired of hearing about the missing billions. We must now focus on issues that truly affect Nigerians. How can govt reduce cost of production in the country? how can they create jobs or even sustain the ones currently available. why are’nt we having fuel, light, good roads, salaries? expectedly, people would argue falling naira does good for our exports, but demand far exceeds our current capacity to produce…that’s another problem lurking. PMB is no Messiah. we must speak up!!

  4. I love that the naira is crashing. Not because I can change my dollars for big big nairas but because in a normal setting, it will let Nigerians think but our setting is not normal.

    Why are we so reliant on the dollar? Why is the market woman telling me that panla is now 10,000 as opposed to the 6,000 i paid last week because the dollar has gone up? Why are we importing everything. Even our babies, we import – delivery in America for American passport

    Again, why are we importing every single thing? Maybe we should leave the dollar alone and not trade in dollars anymore. May be we should focus on trading in naira – by this i mean everything made in Nigeria. No single import to the point where the increase in dollar price does not automatically mean that my panla will jump from 6000 to 10000.

    Why can’t the government put an embargo on imports? No one can import anything while also putting an embargo on rich business men and politicians exporting their healthcare to foreign countries. Why can’t we put in all the big big money we are taking to these foreign countries in our own system?

    Why are we exporting electricity to Chad yet we don’t have stable electricity? Are we mad????

  5. Pingback: 5 Glaring Lies In The Vice President #FuelSubsidy Response | Ofilispeaks

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