Naira On Free Fall -By Christiana Yaris

The Central Bank of Nigeria (CBN) is the sole issuer of legal tender money throughout the Federal Republic of Nigeria. It controls the volume of money supplied in the economy in order to ensure monetary and price stability. The Currency Operations Department of the CBN is in charge of currency management, through the designs, procurement, distribution and supply, processing, reissue and disposal or disintegration of bank notes and coins.

The first fourteen years (1960 – 1973) remain the golden years of Nigeria in terms of the economy. Then, you didn’t need up to one naira to exchange for a dollar. The naira was competing favorably with the British pound and our economy was regarded as an emerging economy. Today, the naira is not faring well against foreign currencies and the economy is still ranked among developing economies. To some, the economy is even considered among underdeveloped economies.

A major cash crunch occurred in February 2023 when the Nigerian government introduced the newly designed currency note changeover, due to the short notice and time limit to return old notes to the bank, it created a dilemma for the citizens of Nigeria as delivery of the new notes to circulation was a difficult one, this event which led to attempt to force citizens to use a newly-created government-sponsored central bank digital currency. This led to extensive street protests.

Naira, has been on a depreciative value for a while as it is recorded that naira value fall this year is something which has never occurred and it has really affected the lives of the citizens by putting them in intense hardships as everything that is sold is jut increasing price by the day, from food, to cost of living, medicines and every other essentials people need on a daily basis.
As at early this week, Naira appreciated against the US Dollar on the unofficial parallel market, commonly referred to as the black market. In afternoon trading, the exchange rate was N1,300 per dollar, representing a 0.76% increase (N10) compared to the N1,310 rate recorded on Tuesday on the black market.

The persistent foreign exchange pressure, exacerbated by the Naira reaching as low as N1,310 per dollar, showed signs of improvement on Wednesday as demand reduced.

The official exchange rate set by the Central Bank of Nigeria: naira to U.S. dollar is approximately ₦767.54 per 1 US dollar. This rate is almost two times different from the illegal black market exchange rate. The Black Market exchange rate of the naira to the U.S. dollar is approximately ₦752.50 per 1 US dollar.

You can’t help but worry against how the free fall of Naira will cause a lot of financial damage to businesses, schools, hospitals, states and even the country at large. If the value of naira keeps depreciating then definitely life in Nigeria will get unnecessarily harder than it already is and it will be harder to cope as Nigerians are already tired of the situation. It will always bring us back to the question on what the Government is trying to do to curb this economical danger?

CHRISTIANA YANIS
DEPARTMENT OF MASS COMMUNICATION,
UNIVERSITY OF MAIDUGURI,
BORNO STATE