According to a report from Daily Trust, the foreign exchange crisis in the country escalated on Thursday, with the parallel market witnessing a dollar exchange rate exceeding N1,000. Black market surveys in Lagos revealed that the dollar was traded between N1,000 and N1,050 during the early hours of Thursday, eventually settling at N990 in the evening. This marked a significant disparity of N252 compared to the Investors & Exporters FX window, where the naira closed at N738.
The gap between the official and parallel exchange rates has been steadily widening since the Central Bank of Nigeria (CBN) announced the unification of all foreign exchange market segments in June. Despite the unification policy, the parallel market continues to thrive due to the scarcity of dollars in the official market, according to market operators.
Ismail Muhammed, one of the operators at Allen Roundabout, stated, “There is scarcity in the market. We are now buying dollars for N990, but earlier in the day, it was sold for N1,000. Some people exchanged it for N1,050.”
Alhaji Abdullahi Olugbede, another operator, attributed the surge to the scarcity, as most licensed Bureau De Change Operators lacked sufficient dollars for trading. He expressed concern about the situation and called for a reduction in the exchange rate.
Economic experts have warned of negative implications stemming from the depreciation of the naira in the black market. Professor Godwin Oyedokun, a financial development expert, emphasized the adverse effects on the economy, making it challenging to conduct business in Nigeria. He cited an example of the high cost of imported goods due to the weak currency.
To address the issue, experts recommended implementing the right policies, boosting local production, and diversifying exports to earn more foreign exchange. They stressed the importance of fiscal and monetary policies working in tandem.
Dr. Muda Yusuf, an economist, highlighted the potential impact on inflation, especially in sectors like fuel, diesel, and gas prices. He also suggested that illicit funds and money laundering might be contributing to the pressure on the naira.
Despite the challenges, experts urged the government not to abandon the unification policy, as changing course could worsen the situation. They noted that the positive outlook for oil prices could help strengthen the country’s currency in the future.
In recent developments, President Bola Tinubu nominated a new governor for the Central Bank of Nigeria, Olayemi Cardoso, along with several deputy governors, pending confirmation by the Nigerian Senate. The status of the former CBN governor, Godwin Emefiele, who was suspended and detained since June, remains unclear regarding whether he has resigned.