FX Facts

Have you ever asked “how much is Dollar to Naira exchange rate?” in this article you will get the Dollar to Naira exchange rate for black.

The Dollar to Naira exchange rate seems not stable rather it fluctuates from time to time against the Naira, leading to the Naira losing most of its value.

This means that Nigerians are likely to spend more buying goods and services in the international market.

The Dollar/ Naira have not had a smooth ride ever since 1986, the relationship between both currency has been unpredictable leaving the economy of Nigeria poorer,

although few people has been able to capitalize on the weaknesses of the Naira to make fortune out of it.

This leaves a question if devaluation of the Naira under a flexible exchange rate will solve the problem once and for all.

In this article, we are going to trace the history of Naira exchange rate to Dollar , how it has fair under previous administration.

President Ibrahim Babagindaâ€s Second-Tier Foreign Exchange Market (SFEM)

The Second-Tier Foreign Exchange Market (SFEM) is a product of the IMF which was presented to former President Ibrahim Babagindaâ€s regime.

The then administration had no choice rather than to accept the conditionality because of the pressure the Naira and the economy as a whole was under.

It will be recalled before now (around 70s), the Naira enjoys a better exchange rate against the Dollar. A United States Dollar ($1) was exchange at 90 kobo

but by 1993 after the brahim Babagindaâ€s regime came to an end the Naira has sheded much value and was exchange at 11 naira for $1.

At this critical point the country had to introduce the bureaux de change. Things did not get much better as most people expected; at least a weaker naira should help the economy

to speed up industrialization as witness in China and other country with weaker currency.

President Sani Abacha (1993-1998)

Late President Sani Abacha held the Naira with an iron grip for a period of five years. The Naira was exchanged at 22 naira for $1 officially. At that time the regime introduced the Autonomous Foreign Exchange Market (AFEM) that engaged in the the sale of Naira to those who need it.

Please note that oil price under Sani Abacha regime was hovering around $20 per barrel and Nigeria was faced with numerous economic problems and some level of economic sanctions by the West leaving the government with little amount of dollars to go round the economy.

The government then was only able to achieve this feet with a rigid exchange rate . Expert now suggests that this gave birth to forex black market.

Infact black market exchange rate became much pronounced more than ever in the history of Nigeria.

Note that the official exchange rate was 22 naira, the black market exchange rate was around 88 naira to 1 $.

Joseph Sanusi (CBN governor 1999 to 2004)

After the military boys left government and handed over to a Democratically elected government, Joseph Sanusi was appointed CBN governor,

he quickly introduced the Interbank Foreign Exchange Market (IFEM) which aim was to narrow the gap between the official exchange rate and the black exchange rate.

The Naira was devalued to 85 naira while at same time the black market exchange rate was 105 to $1.

One should note that at this time Nigeria was struggling to clear its foreign debt; debt servicing alone was taking a toll on the economy

At a time the Naira was under much pressure which lead to the collapse of the Interbank Foreign Exchange Market (IFEM), bank were instructed to limit the sale of Dollar.

Chukwuma Soludo (2004-2009) and The Oil Boom

The Nigeria economy started to boom again, this time oil price rose steadily from just $30 per barrel to $140 per barrel. Subsequently the government miraculously obtained a debt relief of

over $18 billion.

Nigerian government now has more Dollars to save and used to expand the economy. At this point Excess Crude Account (ECA) was introduced which had over $20 billion at the end of 2008.

Please note that at this point Nigeria has multiple exchange rate such as CBN, Interbank, Bureau de Change and wire rates, what Soludo did was to harmonise this rate together, allowed certain things like medical, credit card bills.

During this time there were no need to buy forex in the black market or bureaux de change, exchangers were thrown out the market.

Even when oil prices fell to $50 per barrel Nigerians didn’t feel the impact as there was enough Dollars to cushion the effect.

Point to note : when Soludo came into office exchange rate was around 127 naira to $1 and when he left 147.

Sanusi Lamido Sanusi (June 2009-Feb 2014)

Recalled that Soludo banned the Interbank and WDAS markets? Yes he did but this time all these were reversed by Sanusi Lamido Sanusi when oil prices went up again.

The Nigerian government didn’t capitalize on the rise in oil prices to build up its reserves. Though the exchange rate was stable and sold for 148 naira

and went high to 164 naira at the end of 2014.

Godwin Emefiele and where we are today

Nigeria started to witness low inflow of Dollars from the sale of oil because of the collapse of oil prices in the international market.

The government was forced to introduce strict measures such as banning the Interbank forex market and also 41 items from being eligible for forex,

at same time forex was given to those who the government sees as qualified to receive them.

Here are some facts about the Dollar/Naira

Facts about USD paper money :

Fact about USD coin money:

• The use coins are massively produced with cheap materials such as zinc, copper instead of gold and silver, this made them to have lower intrinsic value.
• 1792 saw the first coin being minted
• As expected Coin last longer and have a lifespan of 25 years. This information comes from the US Mint.
• It seems Americans don’t like to hold on to their coins for long. It is estimated that over $62 million Coins are thrown away by Americans yearly.
• More copper are being used to produce the coins as opposed copper.

Should There Be A Black Market?Most Nigerians have argued that the existence of black market has caused more harm than good this has made the government to suspended the sale of dollars to Bureau De Change (BDC).

But one thing we must understand is that the black market has been in existence for long and they played a significant role in sourcing and selling of dollars to the ordinary Nigerians. Without them it will be hard to get dollars from the bank.

To solve the current problem, The government should ensure that they are properly regulated, those who failed to follow the guidelines should be suspended and if possible prevent large amounts of money to be transacted outside the banking system.The government must also ensure that refineries are established or set up or rather privatised as this will go a long way to stop the importation of Petroleum products into the country as this has bleed the economy for so long. Agriculture should be encouraged mostly in the North, more also security most be provided so that farmers can return back to the farm.

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