Nigeria’s currency has fallen to a record low as inflation surges. How did things get so bad?

ABUJA, Nigeria (AP) — Nigerians are facing one of the West African nation’s worst economic crises in years triggered by surging inflation, the result of monetary policies that have pushed the currency to an all-time low against the dollar. The situation has provoked anger and protests across the country.

The latest government statistics released Thursday showed the inflation rate in January rose to 29.9%, its highest since 1996, mainly driven by food and non-alcoholic beverages. Nigeria’s currency, the naira, further plummeted to 1,524 to $1 on Friday, reflecting a 230% loss of value in the last year.

“My family is now living one day at a time (and) trusting God,” said trader Idris Ahmed, whose sales at a clothing store in Nigeria’s capital of Abuja have declined from an average of $46 daily to $16.

The plummeting currency worsens an already bad situation, further eroding incomes and savings. It squeezes millions of Nigerians already struggling with hardship due to government reforms including the removal of gas subsidies that resulted in gas prices tripling.

A SNAPSHOT OF NIGERIA’S ECONOMY

With a population of more than 210 million people, Nigeria is not just Africa’s most populous country but also the continent’s largest economy. Its gross domestic product is driven mainly by services such as information technology and banking, followed by manufacturing and processing businesses and then agriculture.

The challenge is that the economy is far from sufficient for Nigeria’s booming population, relying heavily on imports to meet the daily needs of its citizens from cars to cutlery. So it is easily affected by external shocks such as the parallel foreign exchange market that determines the price of goods and services.

Nigeria’s economy is heavily dependent on crude oil, its largest foreign exchange earner. When crude prices plunged in 2014, authorities used its scarce foreign reserves to try to stabilize the naira amid multiple exchange rates. The government also shut down the land borders to encourage local production and limited access to the dollar for importers of certain items.

The measures, however, further destabilized the naira by facilitating a booming parallel market for the dollar. Crude oil sales that boost foreign exchange earnings have also dropped because of chronic theft and pipeline vandalism.

MONETARY REFORMS POORLY IMPLEMENTED

Shortly after taking the reins of power in May last year, President Bola Tinubu took bold steps to fix the ailing economy and attract investors. He announced the end of costly decadeslong gas subsidies, which the government said were no longer sustainable. Meanwhile, the country’s multiple exchange rates were unified to allow market forces to determine the rate of the local naira against the dollar, which in effect devalued the currency.

Analysts say there were no adequate measures to contain the shocks that were bound to come as a result of reforms including the provision of a subsidized transportation system and an immediate increase in wages.

So the more than 200% increase in gas prices caused by the end of the gas subsidy started to have a knock-on effect on everything else, especially because locals rely heavily on gas-powered generators to light their households and run their businesses.

WHY IS THE NAIRA PLUMMETING IN VALUE?

Under the previous leadership of the Central Bank of Nigeria, policymakers tightly controlled the rate of the naira against the dollar, thereby forcing individuals and businesses in need of dollars to head to the black market, where the currency was trading at a much lower rate.

There was also a huge backlog of accumulated foreign exchange demand on the official market — estimated to be $7 billion — due in part to limited dollar flows as foreign investments into Nigeria and the country’s sale of crude oil have declined.

Authorities said a unified exchange rate would mean easier access to the dollar, thereby encouraging foreign investors and stabilizing the naira. But that has yet to happen because inflows have been poor. Instead, the naira has further weakened as it continues to depreciate against the dollar.

WHAT ARE AUTHORITIES DOING?

CBN Gov. Olayemi Cardoso has said the bank has cleared $2.5 billion of the foreign exchange backlog out of the $7 billion that had been outstanding. The bank, however, found that $2.4 billion of that backlog were false claims that it would not clear, Cardoso said, leaving a balance of about $2.2 billion, which he said will be cleared “soon.”

Tinubu, meanwhile, has directed the release of food items such as cereals from government reserves among other palliatives to help cushion the effect of the hardship. The government has also said it plans to set up a commodity board to help regulate the soaring prices of goods and services.

On Thursday, the Nigerian leader met with state governors to deliberate on the economic crisis, part of which he blamed on the large-scale hoarding of food in some warehouses.

“We must ensure that speculators, hoarders and rent seekers are not allowed to sabotage our efforts in ensuring the wide availability of food to all Nigerians,” Tinubu said.

By Friday morning, local media were reporting that stores were being sealed for hoarding and charging unfair prices.

HOW ARE NIGERIANS COPING WITH TOUGH TIMES?

The situation is at its worst in conflict zones in northern Nigeria, where farming communities are no longer able to cultivate what they eat as they are forced to flee violence. Pockets of protests have broken out in past weeks but security forces have been quick to impede them, even making arrests in some cases.

In the economic hub of Lagos and other major cities, there are fewer cars and more legs on the roads as commuters are forced to trek to work. The prices of everything from food to household items increase daily.

“Even to eat now is a problem,” said Ahmed in Abuja. “But what can we do?”

Leave a Reply

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

universo-virtual.com

buytrendz.net

thisforall.net

benchpressgains.com

qthzb.com

mindhunter9.com

dwjqp1.com

secure-signup.net

ahaayy.com

soxtry.com

tressesindia.com

puresybian.com

krpano-chs.com

cre8workshop.com

hdkino.org

peixun021.com

qz786.com

utahperformingartscenter.org

maw-pr.com

zaaksen.com

ypxsptbfd7.com

worldqrmconference.com

shangyuwh.com

eejssdfsdfdfjsd.com

playminecraftfreeonline.com

trekvietnamtour.com

your-business-articles.com

essaywritingservice10.com

hindusamaaj.com

joggingvideo.com

wandercoups.com

onlinenewsofindia.com

worldgraphic-team.com

bnsrz.com

wormblaster.net

tongchengchuyange0004.com

internetknowing.com

breachurch.com

peachesnginburlesque.com

dataarchitectoo.com

clientfunnelformula.com

30pps.com

cherylroll.com

ks2252.com

webmanicura.com

osostore.com

softsmob.com

sofietsshotel.com

facetorch.com

nylawyerreview.com

apapromotions.com

shareparelli.com

goeaglepointe.com

thegreenmanpubphuket.com

karotorossian.com

publicsensor.com

taiwandefence.com

epcsur.com

odskc.com

inzziln.info

leaiiln.info

cq-oa.com

dqtianshun.com

southstills.com

tvtv98.com

thewellington-hotel.com

bccaipiao.com

colectoresindustrialesgs.com

shenanddcg.com

capriartfilmfestival.com

replicabreitlingsale.com

thaiamarinnewtoncorner.com

gkmcww.com

mbnkbj.com

andrewbrennandesign.com

cod54.com

luobinzhang.com

bartoysdirect.com

taquerialoscompadresdc.com

aaoodln.info

amcckln.info

drvrnln.info

dwabmln.info

fcsjoln.info

hlonxln.info

kcmeiln.info

kplrrln.info

fatcatoons.com

91guoys.com

signupforfreehosting.com

faithfirst.net

zjyc28.com

tongchengjinyeyouyue0004.com

nhuan6.com

oldgardensflowers.com

lightupthefloor.com

bahamamamas-stjohns.com

ly2818.com

905onthebay.com

fonemenu.com

notanothermovie.com

ukrainehighclassescort.com

meincmagazine.com

av-5858.com

yallerdawg.com

donkeythemovie.com

corporatehospitalitygroup.com

boboyy88.com

miteinander-lernen.com

dannayconsulting.com

officialtomsshoesoutletstore.com

forsale-amoxil-amoxicillin.net

generictadalafil-canada.net

guitarlessonseastlondon.com

lesliesrestaurants.com

mattyno9.com

nri-homeloans.com

rtgvisas-qatar.com

salbutamolventolinonline.net

sportsinjuries.info

topsedu.xyz

xmxm7.com

x332.xyz

sportstrainingblog.com

autopartspares.com

readguy.net

soniasegreto.com

bobbygdavis.com

wedsna.com

rgkntk.com

bkkmarketplace.com

zxqcwx.com

breakupprogram.com

boxcardc.com

unblockyoutubeindonesia.com

fabulousbookmark.com

beat-the.com

guatemala-sailfishing-vacations-charters.com

magie-marketing.com

kingstonliteracy.com

guitaraffinity.com

eurelookinggoodapparel.com

howtolosecheekfat.net

marioncma.org

oliviadavismusic.com

shantelcampbellrealestate.com

shopleborn13.com

topindiafree.com

v-visitors.net

qazwsxedcokmijn.com

parabis.net

terriesandelin.com

luxuryhomme.com

studyexpanse.com

ronoom.com

djjky.com

053hh.com

originbluei.com

baucishotel.com

33kkn.com

intrinsiqresearch.com

mariaescort-kiev.com

mymaguk.com

sponsored4u.com

crimsonclass.com

bataillenavale.com

searchtile.com

ze-stribrnych-struh.com

zenithalhype.com

modalpkv.com

bouisset-lafforgue.com

useupload.com

37r.net

autoankauf-muenster.com

bantinbongda.net

bilgius.com

brabustermagazine.com

indigrow.org

miicrosofts.net

mysmiletravel.com

selinasims.com

spellcubesapp.com

usa-faction.com

snn01.com

hope-kelley.com

bancodeprofissionais.com

zjccp99.com

liturgycreator.com

weedsmj.com

majorelenco.com

colcollect.com

androidnews-jp.com

hypoallergenicdogsnames.com

dailyupdatez.com

foodphotographyreviews.com

cricutcom-setup.com

chprowebdesign.com

katyrealty-kanepa.com

tasramar.com

bilgipinari.org

four-am.com

indiarepublicday.com

inquick-enbooks.com

iracmpi.com

kakaschoenen.com

lsm99flash.com

nana1255.com

ngen-niagara.com

technwzs.com

virtualonlinecasino1345.com

wallpapertop.net

nova-click.com

abeautifulcrazylife.com

diggmobile.com

denochemexicana.com

eventhalfkg.com

medcon-taiwan.com

life-himawari.com

myriamshomes.com

nightmarevue.com

allstarsru.com

bestofthebuckeyestate.com

bestofthefirststate.com

bestwireless7.com

declarationintermittent.com

findhereall.com

jingyou888.com

lsm99deal.com

lsm99galaxy.com

moozatech.com

nuagh.com

patliyo.com

philomenamagikz.net

rckouba.net

saturnunipessoallda.com

tallahasseefrolics.com

thematurehardcore.net

totalenvironment-inthatquietearth.com

velislavakaymakanova.com

vermontenergetic.com

sizam-design.com

kakakpintar.com

begorgeouslady.com

1800birks4u.com

2wheelstogo.com

6strip4you.com

bigdata-world.net

emailandco.net

gacapal.com

jharpost.com

krishnaastro.com

lsm99credit.com

mascalzonicampani.com

sitemapxml.org

thecityslums.net

topagh.com

flairnetwebdesign.com

bangkaeair.com

beneventocoupon.com

noternet.org

oqtive.com

smilebrightrx.com

decollage-etiquette.com

1millionbestdownloads.com

7658.info

bidbass.com

devlopworldtech.com

digitalmarketingrajkot.com

fluginfo.net

naqlafshk.com

passion-decouverte.com

playsirius.com

spacceleratorintl.com

stikyballs.com

top10way.com

yokidsyogurt.com

zszyhl.com

16firthcrescent.com

abogadolaboralistamd.com

apk2wap.com

aromacremeria.com

banparacard.com

bosmanraws.com

businessproviderblog.com

caltonosa.com

calvaryrevivalchurch.org

chastenedsoulwithabrokenheart.com

cheminotsgardcevennes.com

cooksspot.com

cqxzpt.com

deesywig.com

deltacartoonmaps.com

despixelsetdeshommes.com

duocoracaobrasileiro.com

fareshopbd.com

goodpainspills.com

kobisitecdn.com

makaigoods.com

mgs1454.com

piccadillyresidences.com

radiolaondafresca.com

rubendorf.com

searchengineimprov.com

sellmyhrvahome.com

shugahouseessentials.com

sonihullquad.com

subtractkilos.com

valeriekelmansky.com

vipasdigitalmarketing.com

voolivrerj.com

zeelonggroup.com

1015southrockhill.com

10x10b.com

111-online-casinos.com

191cb.com

3665arpentunitd.com

aitesonics.com

bag-shokunin.com

brightotech.com

communication-digitale-services.com

covoakland.org

dariaprimapack.com

freefortniteaccountss.com

gatebizglobal.com

global1entertainmentnews.com

greatytene.com

hiroshiwakita.com

iktodaypk.com

jahatsakong.com

meadowbrookgolfgroup.com

newsbharati.net

platinumstudiosdesign.com

slotxogamesplay.com

strikestaruk.com

trucosdefortnite.com

ufabetrune.com

weddedtowhitmore.com

12940brycecanyonunitb.com

1311dietrichoaks.com

2monarchtraceunit303.com

601legendhill.com

850elaine.com

adieusolasomade.com

andora-ke.com

bestslotxogames.com

cannagomcallen.com

endlesslyhot.com

iestpjva.com

ouqprint.com

pwmaplefest.com

qtylmr.com

rb88betting.com

buscadogues.com

1007macfm.com

born-wild.com

growthinvests.com

promocode-casino.com

proyectogalgoargentina.com

wbthompson-art.com

whitemountainwheels.com

7thavehvl.com

developmethis.com

funkydogbowties.com

travelodgegrandjunction.com

gao-town.com

globalmarketsuite.com

blogshippo.com

hdbka.com

proboards67.com

outletonline-michaelkors.com

kalkis-research.com

thuthuatit.net

buckcash.com

hollistercanada.com

docterror.com

asadart.com

vmayke.org

erwincomputers.com

dirimart.org

okkii.com

loteriasdecehegin.com

mountanalog.com

healingtaobritain.com

ttxmonitor.com

bamthemes.com

nwordpress.com

11bolabonanza.com

avgo.top