Nigerian currency, Naira, has lost a third of its value on unofficial “parallel markets” since last month.
Even though the Naira is plunging on the street, as a result of the collapse of global prices for oil exports, the official exchange rate is yet to budge.
“With the exchange rates, with the economy so far now, it’s not really helping us because the exchange has really gone high and with the goods we have now people are not really responding,” said Chioma Oluwaseun, a wholesaler.
With the exchange rates, with the economy so far now, it's not really helping us because the exchange has really gone high
Commercial banks have been running out of hard currency, forcing importers to tap the parallel market, where a US dollar costs 305 Naira, compared to the official rate of 198.
“That’s a very big problem because you cannot even get hard currencies such as the dollar, euro, or pounds and even if you get it, you cannot transfer because you don’t have inflow according to the Nigerian policy,” said Chucks Okonkwo.
The rising cost of imports risk dragging down the whole economy, with firms across industries laying off staff to offset the premium they need to pay to get dollars.
Nigerians are now calling on immediate mitigations to address the shortfall. The acting head of the Association of Bureau De Change operators in Nigeria believes this will hinder imports to the country.
“They need to address it. I mean there is no choice, there is no choice. They have to address it because its like we are a consumer nation. All our infrastructure for industries are not there. What does that result to? We need hard currency to bring in some machinery,” he said.
President Muhammadu Buhari had promised in December last year that the Central Bank would show some flexibility with the Naira to address the investors’ concern that devaluation will happen soon.