Naira Devaluation: What It Is And How To Protect Yourself

Rise Vest |
April 16, 2020

What is Naira Devaluation?

What is Naira Devaluation?

Brethren!

We hate to be the bearers of bad news (or to be super dramatic by quoting Shakespeare’s Macbeth) but something potentially wicked this way comes. The thing in question is called Naira Devaluation and from the looks of it, it’s going to kick everyone’s asses.

DUN DUN DUUUUUNNNNNN Meme Maker - Dun-Dun-Duuuuunnnnnn | Meme on ME.ME

That being said, don’t worry. We’re here to tell you about the different ways you can protect yourself from this potentially terrible thing. We’ll get to that in a minute. But first:

What is Naira Devaluation?

This is the deliberate downward adjustment or official lowering of a currency’s value relative to another currency or group of currencies. In the case of Nigeria, it would mean the deliberate downward adjustment of the Naira relative to the dollar.

What is Naira Devaluation?

Because of how the coronavirus is ravaging the known world and slowing down global economic growth, there has been a dip in oil prices, draining Nigeria’s foreign reserves and leaving the Central Bank unable to maintain the Naira’s value much longer.

What is Naira Devaluation?

The devaluation of the Naira will make the goods we export look cheaper to foreigners, leading to an increase in demand for exports, which in turn means more revenue for Nigeria. However, devaluation is the exact opposite effect on the goods we import. Imported goods will become expensive because the Naira will have lost value when compared to the exchange rate.

This will lead to an increase in demand for homemade goods – because they’ll be cheaper than the imported stuff we’re currently used to. This doesn’t seem so bad until you remember that without the usual competition, Nigerian industries might become less efficient, causing them to produce sub-par products because they know the people have no choice and will buy them anyway.

The gist of this is that Naira Devaluation may lead to inflation. Also, this:

What is Naira Devaluation?
What is Naira Devaluation?

The answer is the tweet screenshot above. Anyone still holding on to Naira assets at this point is going to get screwed when the devaluation hits. E.g people who have Naira lying about savings accounts, etc. However, people who have investments in things like real estate, stocks, Eurobonds, domiciliary accounts etc (all foreign asset classes) are the ones who will escape the effects of the Naira devaluation.

This is where RISE VEST comes in.

RISE is an investment app that lets anyone put their money in safe dollar investments around the world. Through RISE, you can invest in US Real Estate, US, and Fixed Income. RISE is secure and offers a unique experience with long-term returns. If you want a safe place to invest your money in USD, you’d be wise to invest with RISE. It doesn’t get much safer elsewhere.

Here’s a tweet that puts this in perspective:

The RISE app is available for both Android and Apple devices. Click here to download and start investing today.

What’s up, Zikoko Fam? It would mean the world to us if you spared a few minutes to fill this Reader Survey. It’s so we can bring you the content you really want!

Sponsored by
Rise Vest

Join The Conversation

Bring a friend.

You'll like this

Watch

Now on Zikoko

Recommended Quizzes

how tall are you
March 11, 2020

Did your parents give you enough beans when you were growing up? If they did, then you’re probably around 6’0″ and above. Either way, we created a quiz that can guess your current height (pretty accurately, if we do say so ourselves). Take to see if we nailed it:

November 15, 2019

There are two types of people in Nigeria right now: those who are proud Marlians, and those who are still in denial about stanning the divisive star. So, for those who proudly wear the Marlian tag, we made a quiz to test how well you really know Naira Marley. If you get more than 6 […]

October 30, 2019

2010 was a game-changing one for Nollywood, with our movies making serious cash and getting international acclaim. So, which of these hits released between 2010 and 2019 — from the pace-setting The Wedding Party to the divisive Trip To Jamaica — best suits your personality? Well, that’s what this quiz is here to answer:

November 1, 2019

Twitter is buzzing right now, bringing a new conversation to the concept of cool vs not-so-cool, especially in relationships. If you’ve been thinking about how much of a red flag you are, why don’t you let this quiz help you decide once and for all?

More from Money

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