The Naira Is In A Toxic Relationship With The Dollar. What Should You Do?

September 1, 2020

Citizen is a column that explains how the government’s policies fucks citizens and how we can unfuck ourselves.


CTRL J – Japa

Last Friday, Jason Njoku, the CEO of Video-on-Demand platform Iroko TV dropped a not-really-bombshell bombshell on Twitter. He announced via a blog post and Twitter threads that the tech company is fully exiting (read: leaving) Africa after so many years of losses and losses.

Amidst a series of reasons about why the company loses about $300k monthly because of its Africa operations, Jason Njoku spoke of how the CBN Naira devaluations of this year and the previous years have greatly affected the business. For example, in 2015, a N3,000 annual plan was introduced for customers, which was converted at $18 (N166/$). In 2017, that N3,000 plan became $8.33 (N360/$). Today that N3,000 plan is $6.3 (N477/$). And there’s still more devaluation coming, allegedly.

You can see what happens when a currency keeps falling to another. Money keeps leaving the table. Miraculously.

Why Is The Naira Always Falling To The Dollar?

One phrase – Demand Imbalance.

Nigerians generally need dollars to meet a lot of obligations – including for international school fees, business travels, medical expenses, international airlines tickets, student maintenance allowance, including the importation of crucial raw materials.

What’s more? There is no actual dollars to meet those demands. Our traditional means of gaining dollars which gives us 90% of foreign exchange earnings is through the sale of crude oil, but the Covid-19 pandemic means we are selling less oil for even lesser prices.

Our other sources are all depleted at this time. The Forex reserves which is supposed to serve as a buffer in these times has a little over $36 billion dollars in its coffers, an amount certainly not enough to bridge the dollar demand gap.

All of this means that when the market smells a dollar scarcity, traders begin to hoard the dollar. The price then goes up and and you need more Naira to buy it. The Naira’s bandwidth is then widened through devaluation to allow for a purchase of dollars, and cycle continues.

How Will You Survive These Times?

Tbh, we don’t know. You can send a mail to Godwin.Emefiele@cbn.gov, or pray that oil prices miraculously begin to trade for around $70 and above. But, reading all of our Naira Life stories is a good place to start. May the force be with you, and with us.

Check back every weekday by 10am for more Zikoko Citizen stories.

You'll like this

Doyin Olagunju

Join The Conversation

Bring a friend.

Watch

Now on Zikoko

October 21, 2020

The Nigerian military has a well-documented history of killing unarmed civilians. Listed below are five times the Nigerian military has killed unarmed civilians. 1. Baga Massacre, 2013 On 16 April 2013, 200 civilians were killed and over 2,000 houses were destroyed, with many other people injured in the village of Baga, Borno State, Nigeria. Refugees, […]

October 20, 2020

Earlier today, the Lagos government declared a 24-hour-curfew starting 4pm. However protesters and people who couldn’t go home on such short notice remained at the Lekki toll-gate. News have however reached us that peaceful protesters and people at the toll-gate are being shot at. Here’s what’s happening: To watch it live, click here. For more […]

October 20, 2020

If the president is not moving fast with police reforms, we can submit a petition to the National Assembly. 24-hour Curfew Governor Babajide Sanwo-Olu has imposed a 24-hour curfew on all parts of Lagos State as from 4 pm, 20th October 2020. He also added that only essential service providers and first responders “must be […]

Recommended Quizzes

November 30, 2019

With No Nut November FINALLY coming to an end, we’ve decided to mark the torturous month with some more horny content. After quizzes that guessed how many people you’ve slept with, how good you are in bed and who you’ll sleep with next, this one will guess when next you’ll get lucky. Take it to […]

April 14, 2020

Every friend group consists of very different and specific characters — from the parent to the fun one — and it can be a little tough figuring out where you fall. So, we’ve created a quiz that lets you know exactly what kind of friend you are. Take to find out:

October 10, 2019

2019 is certainly Burna Boy’s year, but, if we are being honest, so was 2018. Since his transcendent mixtape, Outside, the afro-fusion star has refused to get his foot of our necks — dropping a string of fantastic singles and then capping it all off with his career-best album, African Giant.  So, in a bid […]

October 29, 2019

We are going to be attempting to guess when you’ll marry based on your favourite Nigerian foods. What does your fave swallow have to do with when you’ll tie the knot? Please, don’t ask complicated questions. This quiz is rigorous and accurate (don’t quote us), so just take it already. QUIZ: Why Do You Have […]

More from Citizen

October 21, 2020

The Nigerian military has a well-documented history of killing unarmed civilians. Listed below are five times the Nigerian military has killed unarmed civilians. 1. Baga Massacre, 2013 On 16 April 2013, 200 civilians were killed and over 2,000 houses were destroyed, with many other people injured in the village of Baga, Borno State, Nigeria. Refugees, […]

October 20, 2020

Earlier today, the Lagos government declared a 24-hour-curfew starting 4pm. However protesters and people who couldn’t go home on such short notice remained at the Lekki toll-gate. News have however reached us that peaceful protesters and people at the toll-gate are being shot at. Here’s what’s happening: To watch it live, click here. For more […]

October 20, 2020

If the president is not moving fast with police reforms, we can submit a petition to the National Assembly. 24-hour Curfew Governor Babajide Sanwo-Olu has imposed a 24-hour curfew on all parts of Lagos State as from 4 pm, 20th October 2020. He also added that only essential service providers and first responders “must be […]

October 20, 2020

On October 31, 2020, there will be by-elections in Bayelsa Central Senatorial District; Bayelsa West Senatorial District; Nganzai State Constituency, Borno State; Cross River North Senatorial District and Obudu State Constituency, Cross River State. Other by-elections will hold in Imo North Senatorial District, Lagos East Senatorial District; Kosofe 2 State Constituency, Lagos State; Plateau South […]

October 19, 2020

1. Food If you don’t have groceries at home, I don’t know what to tell you. With everything going on, it might be a little difficult or even near impossible to order food from restaurants. But hey, na who dey alive dey order food. 2. Data We’ve all seen how social media has played a […]

October 19, 2020

I’m pretty sure nobody saw the #EndSARS protests coming. Since the 7th of October 2020, when Runtown and Falz announced a demonstration at the Lekki Toll Gate, the movement has spread like wildfire to every corner of Nigeria. Protests are springing up in almost every state and people are catching on to demand better for […]

October 19, 2020

Reports and video footage circulating on social media reveal that prisoners have broken out of a prison in Benin, Edo State Nigeria. Other news media sites have also confirmed the development. At the moment, there is confusion about who exactly broke the prisoners out. While some say hoodlums masterminded the act, some others are blaming […]

October 18, 2020

As Nigerian youths continue to fight against police against brutality under the #EndSARS movement, there has been much ado the setting up of a judicial panel of inquiry in Nigeria’s 36 states, so as to look into the crimes committed by officers of the Nigeria Police Force. The Goal of the Judicial Inquiry The goal […]

Watch

Trending Videos

Zikoko Originals

June 22, 2020
'The Couch' is a Zikoko series featuring real life stories from anonymous people.
June 22, 2020
Hacked is an interesting new series by Zikoko made up of fictional but hilarious chat conversations.
June 4, 2020
What happens when a group of chatty young Nigerians talk about things they're passionate about? You get Nigerians talk. A show that discusses very familiar struggles for the average Nigerian. From relationship deal breakers to sex education with Nigerian parents to leaving Nigeria, be prepared for a ride.
June 2, 2020
Quickie is a video series where everyone featured gets only one minute to rant, review or do absolutely anything.
May 14, 2020
Isolation Diary is a Zikoko series that showcases what isolation is like for one young Nigerian working from home due to the Coronavirus pandemic.
March 12, 2020
Life is already hard. Deciding where to eat and get the best lifestyle experiences, isn't something you should stress about. Let VRSUS do that for you.
February 6, 2020
Who doesn't want to find love? In our bid to help, we paired up a bunch of single Nigerians, sending them on an all-expense paid date, and interviewing them before and after they met.
January 27, 2020
Nigerians Talk is what happened when a motley crew of young Nigerians were put in front of a camera and asked a bunch of apparently random questions about life, love, money and more.
September 24, 2019
A group of Zikoko staff go on a road trip to every mainland country in ECOWAS West Africa

Z! Stacks

Here's a rabbit hole of stories to lose yourself in:

Zikoko amplifies African youth culture by curating and creating smart and joyful content for young Africans and the world.
X