Naira to USD exchange rate crisis for Bureau De Change explained

How much be dollar to naira inside black market today? How much be1$ US in Nigeria? Wetin be CBN & black market exchange rate for dollar to naira?

Dis na di frequent questions Nigerians and those doing business inside di west African nation dey ask.

Di high exchange rate of di dollar to di naira dey make pipo panic nowadays, especially ontop rising inflation and high cost of living for di country Nigeria.

Central Bank of Nigeria [CBN] official exchange rate at N415.37 to sell US dollar and N415.87 to buy USD wit Naira, as at July 29, 2022.

But in reality, di buying rate of di dollar to di naira na N680 and di selling rate na about N710 for black market [dis figure fit don change].

Present policy no dey allow individuals to waka enta CBN to buy foreign currency. CBN only sell foreign currency to Banks and Bureaux de Change.

Checks show say e dey just difficult, wit plenti paper work, to buy dollar from commercial banks in Nigeria to trade.

So many dey turn to black market wia Bureau De Change operators dey trade to buy forex and dia di figures dey climb.

Di matter don dey hammer Nigerians for different states, from Lagos to Abuja, Port Harcourt to Kano and dey cause major hike in prices of goods and services.

BBC Pidgin seek answers from experts across di west African nation to explain wetin dey happun to di Naira, Nigeria currency since 1973.

How much be Dollar to Naira inside black market today?

Bureau De Change operators for Lagos, Nigeria commercial centre, tell BBC pidgin say di naira to dollar exchange rate don worst.

As at Thursday morning dem no even get dollar to sell, according to Young Alahji, wey dey trade forex for Ikeja Bureau De Change.

“Dollar no dey oga, na only buy we dey buy. We dey buy for 685 Naira to one dollar.”

Alhaji Nabahani na bureau de change operator for Kano and e tell BBC Pidgin Friday morning say wetin one dollar dey exchange to naira na N708.

E tok say na drop from Thursday evening wey di dollar bin dey sell for N714.

“Di hope be say e fit continue to drop as di day progress.”

In Port Harcourt, di oil rich city, although di black market price of US dollar na N710 to di naira, dem dey actually buy at N685 and sell at N690 to $1USD.

Bureau de change merchant for di popular Hotel Presidential axis wia dem dey sell dollar for black market, Mohammed Dari tell BBC Pidgin.

‘Dis Naira fall no be surprise’

E no come as surprise say di naira to dollar rate don fall pass N700 as na sometin wey some sabi pipo don predict since last year.

Port Harcourt based business analyst, Ignatius Chukwu explain to BBC Pidgin.

Chukwu, a regional editor of Business Day newspaper, say di Naira dey on a free fall and fit fall down N1000 to di dollar.

E say Nigerians mainly depend on black market to buy/sell becos e dey easy for dem to access dollars dia than for banks sake of di long processes bank dey require.

E add say di naira still dey on free fall and di price fit change anytime pass di N710 wey e dey now and dis don prove di predictions right. 

Five reasons why Naira dey weaker against Dollar

Experts business and economics give some reasons why di naira dey fall.

Ignatius Chukwu say dis reasons include:

1. Gap for Nigeria balance sheet

For some time now, Nigeria dey suffer negative balance sheet.

E mean say di total volume of import dey too much, far above exports and dis don make Nigeria to dey post almost two to three trillion naira deficits.

Before now, no matter wetin Nigeria import, oil exports dey big pass am and knock off di imports so e dey balance gidigba on a positive note .

But for more than two years now, oil no dey fit do wetin e dey do before, so di small tin oil exports dey fetch now no dey enof to knock off di massive imports.

2.Fall in capital imports from six billion to 1.5billion

Dat na foreign dollars wey dey come into Nigeria continue to dey reduce through importation of foreign capital.

Dis na as investors wey bin dey bring dollars into di economy don dey dry up.

Diaspora remittances sef dey dry up too.

3. Huge payments for school fees for pipo wey dey school abroad

Dat one dey move from 1.5billion to six billion dollars.

Ignatius Chukwu say by di time citizens cuff out six billion dollars to pay for school fees evri year, e mean say so many hands dey chase di US dollar.

So di balance between demand and supply of dollar dey so much against di dollar wey go bring in speculators to finish work.

4. Speculators round tripping:

Speculators na market makers becos di moment dem enter any market, based on dia projections say price of dollars dey likely to rise, dem go mop up and buy enof dollars so dat wen di price rise, dem go resell.

Dis go create scarcity of dollars wey go make dem release di dollars but at a higher price make massive gains.

Dis one na offense and dem call am ‘round tripping’ becos dem no dey buy di dollars for productivity but to sell few moments later to make huge profits.

“Once any sector of di economy allow market makers / speculators to see much gain e dey hard, Ignatius Chukwu tok.

"Na im make e good make goment discourage speculators becos wen dem speculate any aspect of di economy like fuel or any commodity or dollar or land, dem fit buy up huge quantities to cause scarcity.

E "go make di price go up and resell at higher prices wey dem create and make big killing (profits). Dat na wia we dey now."

How di exchange rate dey affect average citizens?

Di Business Analyst say for kontri like Nigeria wey di average citizen dey earn less than a dollar per day, dis present situation mean say for evri tin citizens use, e dey likely say dem go pay 60% dollar value inside.

Chukwu explain say dis one mean say importation and sources outside Nigeria control go take 60% of wetin dem wan do.

So dis one don expose evribodi to di erratic and unpredictable change in dollar/naira rise and fall.

"Dis one mean say di over 200 million Nigerians dey exposed to naira value discrepancies or inconsistency [alias unstable exchange rate]

"We no dey protected again. So almost evri pesin go dey affected by di inflation dollar dey cause before you go tok of oda types of inflation we dey exposed to." 

Solution to Naira - USD Exchange rate dey?

Nigerian goment don try many ways to control di situation such as to stop Bureau de change (black market) operators but e no work.

"Di solution na to identify wetin dey cause di inflation, wetin dey make di price of dollar to rise.

"Na wen you address di cause squarely you go see di solution."

Some of di solutions di financial analyst identify na:

Reduce importation:

Dis e say na becos dem discover say na high importation dey cause high demand for dollar.

but dat no be sometin goment fit address in one day or in three months becos if dem announce ban on importation, Nigeria go crash.

So na sometin dem need to handle gradually.

Increase exports:

OPEC don give go ahead for Nigeria to produce and sell two million barrels of oil a day but na 1.2, 1.3 million barrels Nigeria dey produce wey give very big gap. 

“If we meet di two million barrels evri day, we go get about 700,000 barrels of profit on dollars wey go come in.”

Boost local manufacturing:

Dis, e say go need more than one year to see any turnaround but di problems require today solutions. 

Central Bank of Nigeria gatz pump in dollars to di economy:

But dat go depend on di outcome of di meeting CBN dey hold with di Federal Goment and National Assembly. 

'Nigeria 2023 election don make us vulnerable’

Nigeria 2023 election season no make am easy as di eye of goment dey focused on winning election, not on di economy so tins no dey stable, expert tok.

Also many borrowers and international financiers dey wait to see how tins dey go so dem no go wan borrow out money to goment wey dey exit power.

So dis na vulnerable period Nigeria dey in now.

“But wen di next goment come in, dem go study di policies e go bring to know how to play.

"Nigeria economy na regime-based economy so investors sef don learn to deal with us like dat.

"So nobody dey sign MOU with out-going goment becos for many places, goment no dey continue projects di previous administration start so abandoned projects full evriwia and na loss for dem."

In di meantime to survive dis situation especially with di high inflation, Ignatius Chukwu advice for citizens na to cut down on expense.

E say make dem try local production of food like small scale farming and gardening so dem fit farm wetin dem go chop and live within dia means with savings for rainy day.

How Naira to Dollar exchange crash since 1980s

For 1980, during di height of di oil boom, one dollar $1 bin only dey valued at 55 kobo, but now, as at CBN value one dollar at N415.87.

All di informate here dey come from di Central Bank of Nigeria.

1980 - ₦0.55

1982 - ₦0.67

1984 - ₦0.76

1985 - ₦0.89

1986 - ₦2.02

1987 - ₦4.02

1988 - ₦4.54

1989 - ₦7.39

1990 - ₦8.04

1991 - ₦9.91

1992 - ₦17.30

1993 - ₦22.05

1994 - ₦21.89

1995 - ₦81.20

1996 - ₦81.20

1997 - ₦82.00

1998 - ₦84.00

1999 - ₦93.95

2000 - ₦102.10

2001 - ₦111.93

2002 - ₦121.0

2003 - ₦129.3

2004 - ₦133.5

2005 - ₦131.1

2006 - ₦ 128.29

2007 - ₦118.21

2008 - ₦126.48

2009 - ₦148.78

2010 - ₦150.48

2011 - ₦158.23

2012 - ₦157.32

2013 - ₦157.27

2014 - ₦169.68

2015 - ₦196.99

2016 - ₦305.22

2017 - ₦306.31

2018 - ₦306.92

2019 - ₦306.95

2020 - ₦381

2021 - ₦410.47

2022 - ₦415.87

Producers:Daniel Semeniworima - Senior Journalist, Andrew Gift - Lagos Reporter, Karina Igonikon - Port Harcourt Reporter