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.

Join The Conversation

Bring a friend.

You'll like this

July 25, 2021

From time to time, I see tweets about how living abroad as a Nigerian is tough because it gets lonely. In the past, whenever I saw those tweets, I thought, “I’d rather be lonely abroad than suffering in Nigeria.” But then I spoke with these five people on Abroad Life and their stories made me […]

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 […]

Watch

Now on Zikoko

Recommended Quizzes

January 2, 2020

Do you have even a single romantic bone in your body? Well, if you’re not sure about just how sweet and thoughtful you can be to someone you love, that’s what this quiz is here to answer. 11 Quizzes For Nigerians Who Are Ready To Marry  Are you ready to marry? Take these quizzes.

November 19, 2019

Regardless of what society has tried to tell us, enjoying sex is not something to be ashamed of. So, in a bid to celebrate our generation’s sexual agency, we’ve created a quiz that will accurately (again, keep your complaints to yourself) infer how many people you’ve spelt with. Try it out: 11 Quizzes For The […]

April 1, 2020

Everyone has a Nigerian bank that matches their personality. You could either be as likeable as GTB, as efficient as Access or as mature as First Bank. Either way, all you have to do is take this quiz and we’ll let you know with almost 100% certainty. So, go ahead:

More from Citizen

Watch

Trending Videos

Zikoko Originals

December 14, 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.
November 2, 2020
'The Couch' is a Zikoko series featuring real life stories from anonymous people.
October 26, 2020
A collection of videos documenting some of the events of the EndSARS protests.
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.

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