WHO BENEFITS WITH THE FALL OF NAIRA?

Bag-of-Money

Submitted by J Duke Anago

Notwithstanding the efforts of Central Bank to keep naira’s exchange rate at  N197 /$1, for a while now,  naira has continued to fall. In fact, at the parallel market on Monday, it was sold for N251 against one dollar.

The reason behind this depreciation is in duplex: First, the growing shortfall between increasing demand for foreign currency and the foreign exchange available for sale because of the cap CBN put on the amount of  foreign currencies sold. Secondly, the decreasing demand for Nigeria’s crude oil in the international market.  For this reason, the Nigerian National Petroleum Corporation had to reduce the price of the country’s crude oils to their lowest points in over a decade. And while the central bank tries to keep its official exchange rate N197, the parallel market players are exploiting this gap to make huge profit off the state hence raising a big question: who benefits from CBN Governor and the President’s resolute on keeping Naira at the current rate even when the parallel market owners who claimed to source for dollars externally has devalued naira already?

Those benefiting from this financial quagmire are in duplex as well which pushes Nigerians to ask if the President and CBN governors are protecting some interests with their reluctance to devalue an already devalued currency?

The first beneficiaries are the International investors who transfer foreign currency to Nigeria in the guise to invest. They convert their investment in Naira through the parallel market (black market) which returns huge figures compared to the amount made and funds converted through official CBN rate. They won’t go through CBN for the conversion because the CBN rate is unrealistic at N197/$1. After they have sold this money to the parallel market, they Head to CBN and buy dollars at CBN rate because they want to repatriate their money back. And since they are big investment companies, CBN sell this category as a genuine business dealing. Automatically, they made a huge profit without doing any business in Nigeria.

Currently, the naira is sold at N197 to a dollar at the CBN regulated interbank market, it goes for about N245-N250 to a dollar on the streets of most cities in Nigeria, thereby creating a difference of N48-N53 per dollar for speculative round-tripping which allows bank to obtain dollar at the official rate and diverts to parallel market and sold at a higher rate than they bought from CBN. So, the foreign investor that moved this money through the banks as a foreign direct investment gets paid the value on the black market. Thus, the investor and the banks are smiling while the economy is slowly dying. The CBN governor who refused to devalue the dollar cannot claim ignorant of this. Therefore, he is enriching Bank Owners and dubious investors.

The second group benefiting are the sellers and owners of BDC. We know that the Northerners predominantly are the owners and dealers in the foreign exchange market in Nigeria. It is their business, and you dare not implement policies that would affect them. So the President’s  continuous refusal to devalue Naira Naira even when the BDC operators have devalued the currency is merely consenting to the continuous round tripping to enrich more northerners at the expense of the local populace who do not have the wherewithal to bid for CBN rate. They suffer and purchase dollars at an exorbitant price. Last week, Fidelity Bank ATM Visa debit card charged  N38,000 for £100 worth of goods purchase.

To further justify this argument, permit a theoretical analysis here. A Nigerian importer who usually imports 2000 pieces of XYZ product with $10,000 can only import 1300  XYZ  product for the same value whereas a Chinese man that regularly buy 100 logs of wood for $10,000 now buys 120 logs of wood for the same value. So the policy of refusing to devalue the currency when ordinary citizens and traders who need to transact personal transactions abroad now that globalization has made buying and selling easy worldwide, cannot buy at CBN rate is not only illogical but unpopular.

Therefore, the CBN policy that refused to devalue and yet pegged the dollar supply at $250,000 per week is not only encouraging round tripping, but it is killing the economy. The CBN tight foreign exchange policy is not working. Time has come for the CBN governor to devalue Naira or remove the peg on an amount of dollars sold at the interbank market. The economy is in hemorrhagic fever, and the 90% of the citizens are suffering. Nigerians cannot continue to operate like this.

Please rate this

7 Responses to WHO BENEFITS WITH THE FALL OF NAIRA?

  1. aggiehip Reply

    September 14, 2016 at 5:37 pm

    Flomax 0.4 Mg Muscular Dystrophy And Zocor . Migraine Doctor Manhattan Etiology Of Asthma Exacerbation Buy Gentamicin-Eye-Drops Without Prescription Tylenol Dengue Virus Women Hair Loss Moore For_patients Ultram For Urinary Tract Pain Nbc News Diabetes Type One . Detrol Ditropan Urinary Incontinence Pka Of Aspirin Weak Acids Zestril And Grapefruit Heart Palpitations Elimite Without Prescription . Novedex And Tribulus Gaspari Nutrition St Minoxidil Prescription Atarax Buy Without Prescription Ibuprofen Together Paracetamol And Codeine .
    Infant Blood Pressure Ranges Preterm
    New Pictures Of Type 2 Diabetes Bladder Infection Sulfa Allergy New Medicines For Diabetes Diet And Exercise
    Buy Amoxicillin-Tablets Without Prescription

  2. aggiehip Reply

    September 15, 2016 at 8:28 am

    Buy Ambien Online No Prescription Echinacea Razzmatazz Daisy Petals Methadone Clinic Northridge Buy Triquilar Online . Vicodin With Pink Dots Diabetes And Renal Diet Chronic Motrin And Nursing Drugs Minocycline Acne Time . Infant Prilosec Benefits Osteoporosis Society Of Pakistan . Lotrel Fda Approval Aciphex At Bedtime Elimite No Prescription Ontario Diabetes Foundation H57 Reviews South African Hoodia Gordonii Taking Xanax After Lsd Tartrato Cheap Zolpidem
    Lipitor Help Diabetes Type 1 Prevent
    How Hates Pepcid Ac Work Tentex Royal Indications Alesse Fda Iron Deficiency Anemia
    Generic Epivir

  3. aggiehip Reply

    September 15, 2016 at 1:29 pm

    Omeprazole Hplc Method Prices For Diazepam . Organs By Diabetes Pepcid Etats Unis =Visit Here]Buy Viagra Online Best Weight Loss Herbal Diabetes Knowledge Management Harvard Nurses Study Osteoporosis Aricept Abuse Treatment . Glyburide And Vitamin B12 Deficiency Yeast Infection Side Effects Online Prescription Ribavirin Free Consultation Buy Retin-A . Does Keflex Got Penicillin Insulin Types For Diabetes Boniva Side Effects Treatment Mallinckrodt Oxycodone Er Oxy .
    The Pill Lisinopril Look Like
    No Prescription Shipping Buy Actos Migraine Malaise Symptoms Insulin Dependent Diabetes Children

  4. aggiehip Reply

    September 15, 2016 at 9:07 pm

    No Prescription Buy Maprotiline Amoxicillin Suspention Dosage For Cat Names Of Osmotic Diuretics Cerebral Edema Buy Estrace No Prescription . Taking Effexor And Lexapro Dating Restylane Hyaluronic Acid Juvederm Injections Patchy Hair Loss Rash Alli Stock Allion Healthcare . Comprehensive Metabolic Diabetes Topamax Eye Problems Bitter Taste . Protelos For Osteoporosis Cmaj7 Asthma Guidelines Buy Toradol Online Worksheet For Blood Pressure Diabetes Slides Insulin Resistance Propranolol And Digoxin Effects Sports Calcium Carbonate
    Risperdal Drug For Children
    Serum Fsh And Free Testosterone How Do You Calculate Percentage Weight Loss Bupropion Withdrawal Syndrome

  5. aggiehip Reply

    September 16, 2016 at 7:17 am

    Simvastatin Vs Altace Signs Of Type Ii Diabetes Early Warning . Tv Weight Loss Challenge Launch Paxil And Muscular System Buy Bactroban Macrodantin Uti Prophylaxis Sugar Migraines Monosodium Glutamate Rosario Dawson Weight Loss Plate Diabetes Doctor Journal . Zocor Side Effects Diarrhea Taste Using Plavix Skin Infection Azithromycin Buy Cozaar Online . Metformin Lisinopril 10mg 50 Mg Metoprolol Succinate Er Tips For Weight Loss Fastest Online Canadian Pharmacy Prescriptions Written .
    How Long Do Hydrocodone Dosage Last
    Topamax And Pregnancy How Does Exelon Work Transdermal Patch What 500mg Keflex Cephalexin

  6. aggiehip Reply

    September 16, 2016 at 3:14 pm

    Diovan Hct No Prescription Delivery Cheap How How Do I Know If I Stop Smoking Cannabis Century Old Ginseng Buy Gentamicin Online . Coq10 Safe In Pregnancy Diastolic Blood Pressure Cheap Ciprofloxacin Side Effects Babies Born Addicted Oxycodone Generics Of Fluoxetine . Vitamin C Recommended Daily Tolerable Upper Intake Level Ibuprofen And Flu Vaccine . Tramadol Cpt Code Webmd Zocor Side Effects =Estradiol-Valerate Without Prescription]Estradiol-Valerate Without Prescription How Long Does Reminyl Take To Work Farmacie Book Cialis Lamictal And Cries Physicians Desk Reference Keppra
    Cetirizine Dolirhume No Prescription Online Purchase
    Plan B Availability Oral Contraceptives Natural Skin Care Sweden Heartburn In The Tongue

  7. aggiehip Reply

    September 17, 2016 at 12:36 pm

    Combination Blood Pressure Prescription Drugs Medicine Cataflam Non Steroidal Anti Inflammatory . Avandamet No Prescription Free Magnetic Jewelry For Arthritis Order Bactrim How Long Does Tramadol Stay In Your Bloodstream Statistics On Type 2 Diabetes Kidney Diseases Evista Health Free How Loose Skin After Weight Loss Tighten Up . Zetia And Amnesia Syphilis Augmentin 875mg What Are The Active Ingredients In Claritin Order Elocon . Junior Motrin Concentration Reglan 4 To Po Conversion How Much Hydrocodone Can You Take In A Week Permethrin Lindane Acticin .
    Diabetes Type 2 Diet Code
    Celebrex 200 No Prescription Sell Can Migraines Last For Hours Flexeril And Kidney Function

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>