The Nigerian naira is falling in value. This spate started as far back as the 1990’s. However, it has become more pronounced in recent times, especially in the past few months. Fall of the Nigerian currency against the GB Pound and the US Dollars also climate to its fall against a host of other world currencies, like the South African Rand and even the Ghanaian Cedi.
This is not surprising anyway. The Nigerian economy is being battered presently. There is economic and political instability. Social insecurity is also another factor working against the Nigerian economy today. The CBN insisted it was not going to devalue the naira, but it could not maintain its stand in the face of growing depreciation in the value of the naira, leading to a huge gap between the Nigerian currency and those of other countries of the world.
Also Read: Rand to Naira Exchange Rate Today
The CBN insisted it was not going to devalue the naira, but it could not maintain its stand in the face of growing depreciation in the value of the naira, leading to a huge gap between the Nigerian currency and those of other countries of the world.
As At Today Find Cedi to Naira Exchange Rate Below
Factors Leading to the Fall in Value of the Naira
The amount of foreign exchange available in Nigeria is very low and the demand for foreign exchange keeps on increasing. This is a principal factor leading to fall in value of the naira. As a result of the increasing demand for scarce foreign currencies, more naira is now chasing few dollars, leading to fall in the value of naira.
Nigeria is an oil-dependent country and this is where we got most of our foreign exchange. As a result, fall in the price of crude oil has led to reduction in the amount of foreign exchange Nigerian has access to. This led to scarcity and increase in price of dollars.
Nigerians love imported products too. we love to import everything. We need foreign currency to fulfill this importation dream. If an item is not imported, Nigerians would count such item as inferior. This demand for imported goods lead to more demand for foreign currencies and this led to fall in the naira.
However, it certain Nigeria can reverse this trend by buying products made in Nigeria. This will surely reduce pressure in the naira and will reduce demand for foreign currencies. Many Nigerians know what to do but the big question is: are we ready to do it? Are we committed enough to our nationality to want to make such sacrifice?
The government too has a role to play in this whole thing. For the naira to return to its place of pride again, there is need for total overhauling of the Nigerian infrastructure. Infrastructural development is the way to go and the earlier we begin that, the better for Nigeria.
The government must make the system accommodating and encouraging to local manufacturers and producers. The government can also set the pace for buying Nigerian made products. This will set the pace for other Nigerians to follow.
The government must ensure that peace return to every part of the country. This will encourage foreign investors to come and establish companies here. Such will increase amount of foreign currencies in circulation in Nigeria and will further boost the country’s economy and will strengthen the naira.
Diversification of Nigerian resources is yet another way to go. If we are to get out of economic doldrums, then we have got to look into developing other sectors of the Nigerian economy.