Out of 166 global currencies ranked by Xe, the world’s favourite currency site, in terms of popularity, Nigeria is in 58th. The Africa’s most populous country’s currency is behind Kenyan Shillings, Egyptian Pounds, Tunisian Dinars and Moroccan Dirhams. Over the years, Naira performance against the most popular currencies such as US Dollar, Euro and Great Britain Pounds has been a game of ups and downs. However, being popular does not mean being valuable in the world. World Data notes that between January 2015 and September 2021, the exchange rate for 1000 NGN developed from USD 5.03 to USD 2.43, indicating that for 81 months it fell by 51.7%.
During the challenging periods [days, months and years], the Central Bank of Nigeria made and still making a number of strategic decisions to salvage the currency total collapse. In spite of this, it appears that the decisions have not really yielded desired results as the currency continue to dwindle every day.
From the stakeholders in the banking and financial sectors, and citizens to the government, there are have been counter and alternative arguments on how the stakeholders are sabotaging various policy measures of the apex bank. It has reached a stage that if necessary steps are not taken, manufacturing sector and other essential sectors of the economy would suffer greatly, when it becomes practically impossible to access forex for importation of essential raw materials and manufactured goods.
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In its efforts of making the currency strong, the CBN recently outlawed operators of the Bureau De Change across the country. This yields little or no results as the currency refuses to bounce back and be valuable among other currencies in the world. Some days ago, the apex bank after its Monthly Meeting figured Aboki FX, a platform that provides foreign exchange information to the public using gathered data from the BDC, as “manipulator” that contributes to the dwindling of the currency.
As the CBN and the platform exchange statements on the issue, our analyst examines the CBN’s position through the public information seeking behaviour in relation to foreign exchange features. The submission from the CBN and national newspapers has been that the reportage of Aboki FX’s daily information and application by the public [buyers and sellers] facilitate the fall of Naira every day. Our analyst verified this proposition and analysis reveals a number of surprising results and insights.
Aboki FX’s Presence on the Internet
In the first instance, there is a quite volume of publications about activities of Aboki FX on the Google Search Engine. Our check reveals that in relation to Aboki FX, people are also searching Abokifx BDC Rate, Abokifx Euro to Naira, Abokifx Pounds to Naira, Abokifx Exchange Rate in Nigeria today Black Market and CBN Exchange Rate. While over 200,000 publications are available for understanding Abokifx, there are over 2 million publications for the public to understand foreign exchange rate within the context of the Central Bank of Nigeria in line with other sources.
Exhibit 1: Aboki FX on Google Search Engine
With these, our analyst notes that there is no way the apex bank would not have issues with Aboki FX because of the huge volume of existing information regarding exchange rate understanding via Black Market, which indicates that people are getting relevant information through the platform. This position is further reinforced with the rate at which the public sought information between January 1 and September 18, 2021 [see Exhibit 2 and Exhibit 3].
Exhibit 2: Nigerian Population Information Seeking between January 1 and September 18, 2021 Across Select Indicators
Exhibit 3: Nigerian Population Interest Across Select Indicators by Month
Naira’s Hobbling in the Midst of Public Information Seeking
Analysis further shows strong a connection between the public interest in Aboki FX and Euro [90.9%], Pounds [73.9%] and US Dollar [52.6%]. In terms of the extent to which public information seeking using Aboki FX platform facilitates their interest in these currencies, Euro and Pounds are also better off than the US Dollar. With this, we expect Naira to react based on the information public consumed from Aboki FX and put into use. This was further verified with a Ripple Effect Analysis [REA] carried out using extrapolating approach. The Monthly Average Rate of CBN, covering January to April, 2021 and Aboki FX’s Lagos Bureau De Change Rate, spanning September 1 to September 17, 2021 were harvested for analysis.
Exhibit 4: Percentage of Influence Public Interest in Knowing Foreign Exchange through Aboki FX had on Buy and Sell of the Foreign Currencies
Our analysis reveals that 67.6% connection of the public interest in Aboki FX’s and CBN’s Monthly Average Rates. However, only 45.7% of the interest could be explained from the interest in the CBN’s rate. Like the previous results, the interest in seeking information about the foreign exchange through Aboki FX partially aligned with the Lagos Bureau De Change Rate within the buy and sell categories. By 23.9%, the interest in Aboki FX and the categories are resonated within Euro, while it was 16.7% and 10.3% for Pounds and US Dollar respectively. This pattern also emerges when the extent to which the interest could be determined from the categories [buy and sell] was considered [see Exhibit 4].
The emerged insights have shown that there is a need for the stakeholders to come up with sustainable solutions to the currency’s dwindling. The CBN’s decision to sanction Aboki FX could deliver certain results in the short term. It won’t address fundamental issues that fuel the poor performance of the currency locally and globally, preventing volubility of the currency in the world. Nigerian government needs to address issues of high importation of non-essential goods and help SMEs in their quest of building sustainable manufacturing sector.
It does. It is treating Naira like Bitcoin.
Everyone warming up to lead Nigeria at various levels come 2023 ought to be immersed in deep thinking and intellectual pilgrimage, simulating on potential solutions on how to revitalise and modernise Nigeria’s economy. But what is dominating conversations? Zoning, tribal supremacy, political party prostitution, and we deploy talent and energy discussing and debating nonsense.
We don’t even have the capacity to locally refine cooking gas our people use, yet it’s something that is always in demand, but we remain astonishingly incapable of making it abundantly available.
Dangote bailed us out on cement, else we would still be adding it to our forex demand till today, but it’s easy to say rubbish about the man doing most of our heavy lifting. He will soon bail us in petrol, bail us in fertilizer, sugar is still a long way; who will bail us with local substitute for wheat flour? We spend fortunes there.
Citizens make these things happen, but we still want government to be building factories, producing items, then it will turn around to sell at a loss, with unionised workforce regularly demanding one entitlement or another.
When you are asked to draw list of Nigerian heroes, start with Aliko Dangote, then you can add Abdul Samad, and continue in that order. These are the real believers of Nigerian Dream, you cannot do it from America, Canada or Germany, because governments of those places still decide how much you can repatriate back to Nigeria, so never underestimate contributions of Nigerians who believe in this land and are betting everything they have got on it.
Our needs and problems are many, but who can take up the challenge? If you can and excel, then you are the greatest!
Oga shot up. When you brain is not working properly please don’t say anything. Dangote and his political prostitution with the government is 5he major problem we have in this country. When the government decided to cripple everyother player in the field just to favour one man in the game of Monopoly that is a means to ensure that the country is kept under the vices of poverty because as a man, he can only do so much at a time
Dangote did not and can could not have rescued this country in the cement sectors because this country is still suffering from gross cement shortages. Instead he is only rapping this country to death with Monopoly. If all able persons who has interest in manufacturing in this country are given a fair playground for business, the country would have done a lot better but here Dangote is always bribing his hat through all the government to ensure that there is always a ban in every product he has interest in all for the reason if him having Monopoly in that products. For instance, how can anyone else be able to produce or import sugar into this country when it is only dangote and bua that has the licence for the production and importation of the product? Same thing goes to the licence for accessing foreign currency for such ventures. You should try and exercise your brain sometimes before you come out and vomit rubbish exposing your empty head filled with ignorance and no brain.
Most often, it is not that this class of people that turn the truth upside down are oblivious of the realities. Usually, they are very involved. They are either political agents, government contractors or direct beneficiaries of the madness. In all of 20 years, it is Dangote dominating everything while hundreds of other capitalists have been run aground. Well, we are all not morons or politicians!
Nigeria must first of all strike a balance between demand and supply before the exchange rate is stabilized.
Provisions to basic needs (i.e food, shelter, security, quality/accessible health care and education, transportation means should be the focal point to the government.
Monopoly to industrialization and entrepreneurship shined; as these will arise more potentials and innovation. Nigeria is so big that few individuals control flow of the economy when the government is overwhelmed or incapacitated.
The CBN’s move can never lead to appreciation in the Naira. In fact it might get worse. This time information assymetry would spark further depreciation. While your explanations sre not clear, I think your conclusions are spurious.
Do you mind this fake and useless guy who does copy copy every time?
Just ignore the bastard
As illogical as it may sound, abokifx influences the demand and supply rate behaviour of Nigerians at home and abroad.
The demand and supply of forex by Nigerians is not only for imports but to keep value on their hard earned money (as abokifx keeps you informed that the naira is depreciating daily, it influences the demand for the greenback and abokifx also controls the rate at which this is supplied in the parallel market.
This ethnic jingoist is writing rubbish as usual, I don’t blame him, I blame abokifx that allow this rubbish.
Fake and useless professor
See, CBN should go ahead and Ban google, ban Twitter ban aboki FX. Close borders, close anything closeable .
1USD = 1000 before the election.
We will all see.
Their policies are not working.
Where is Ikoyi looted money ? Have we fast forgotten.
Abokifx is not Naira’s problem. It’s not the reason the currency is depreciating. How does Abokifx source the information it publishes? Of course from the market.
Abokifx staff are out on the street interacting with operators to get latest market information it publishes for public consumption. How that service has become a sabotage is difficult to understand.
The operators of the websites are not fx dealers. They are only providing information using their private resources. If relevant public agencies were providing such critical information, Abokifx will not be popular.
The problem of the Naira is obvious and CBN should address it. The multiple exchange rate policy is an incentive for speculation and arbitrage. Lack of transparency in fx allocation is another.
Big men and women, politicians and their friends whose businesses start and end in their briefcases get fx at CBN official rates and simply sell in the black market.
Manufacturers and others that truly need fx hardly get it. They have to resort to the black market to source fx to fund their imports.
Will the apex bank sincerely say it’s not aware of this? What action has it taken?
The point is that there are fundamental issues affecting the Naira, apart from the fact that we are not exporting enough to earn sufficient foreign exchange to meet demand.
These are the issues CBN should be addressing.