In June 2023, the Federal Government of Nigeria announced the unification of the country’s currency to reduce the gap between the CBN’s official exchange rate and the black-market rates, bolster Nigeria’s foreign exchange reserves, and encourage economic expansion. To understand how the current economic policy has affected everyday Nigerians and understand their perspectives on the policy, our analyst looks into social media data, specifically YouTube, to understand the direction of the commenters’ sentiment and perception of the prevailing economic condition.
Having collected a total number of 274 comments from a video titled “N820 Naira to $1? Exchange Rate Policy Explained” and posted on Fisayo Fosudo’s YouTube Channel, the sentiment revealed in the comments demonstrated that Nigerians perceive the country’s exchange rate policy differently.
A step toward economic growth and expansion
Many of the commenters expressed views that demonstrate that the policy is a good one and expressed their conviction in its ability to help the country’s struggling economy significantly. For instance, some commenters believe the policy will help attract foreign investors. They opined that a more stable exchange rate could create a favorable economic atmosphere for international investors, thereby fostering increased capital inflow. According to one of the commenters, “The unification is good. It will attract investors.”
Another commenter named @jonesh6204 observed that the policy will help the country’s economy if the refineries start functioning. According to him, “I think it will have a positive effect if our petroleum refineries start working again and we start selling to other African countries accepting only naira as means of payment.” Others noted that it will help address and eradicate the country’s multiple exchange rates, which they believe will culminate in greater transparency and fairness in the market. “Multiple exchange rate is evil, it is [exploitative] and creates room for double-standard sharp practices. Thanks for its abolishment, it makes no sense having multiple exchange rates,” one commenter who goes by the name @ufotekere9391 asserted.
Some commenters highlighted that the policy will encourage self-sufficiency, which is a prerequisite for bolstering a country’s economy. According to these people, a concentration of effort on production capabilities can enhance economic resilience and reduce dependency on foreign currencies. A user stated, “Being self-sufficient is what grows the economy and makes the Naira strong.”
Concerns over its negative economic implications
However, contrary to the idea of the commenters who believe the policy will turbocharge economic growth, others highlight and express concerns over the influence of foreign institutions, stating that Nigerian political leaders always want to pander to the whims of the World Bank and the IMF, at the expense of the general well-being of the people who entrusted them with the power to govern the state on their behalf.
A commenter with the name @darkev said, “Let’s be clear about one thing: as long as we continue to pursue neoliberal economic ideas promoted and enunciated by [the] IMF and [the] World Bank, that limits government in the commanding heights of the economy, the exchange rate will continue to fluctuate and depreciate.”
Other commenters also warned that letting the demand and supply of the market determine the direction of the naira will affect many households, stating that allowing the adoption of such an economic policy in a country where most of the inputs of local manufacturing are imported will erode the purchasing power of ordinary Nigerians. One commenter named @MichaelO2 wrote, “At this point, the unification is ill-timed, senseless, and doing things backward because it will cause more foreign exchange flight out of Nigeria.”
Another commenter also echoed the view that the economic policy is poorly timed and can exacerbate the living conditions of ordinary citizens, as their purchasing power consistently weakens. “While the idea of unification is positive, the unfortunate reality is that the timing is unfavorable. It is clear to anyone in their right mind that implementing a floating rate without building up reserves is unwise,” a commenter with the name @PersonalFinanceProdigy noted.
What Next?
Chinenye Iwuh notes that switching exchange rates doesn’t exactly address the systemic economic issues the country faces. Similarly, Lagos-based economist Ejike Nwolisa observes that “the real solution for our foreign exchange problems lies outside the monetary policy space” and noted that achieving a strong economic structure requires more than just floating the currency. “The best policy combo to achieve this is policies that fast-track local production of our major consumables. Stable and regular electricity, good transport infrastructure, and quality education are no-brainers in achieving this target. Without these fundamentals, our economic woes, exchange rate inclusive continue. Sad but true!” he concluded.
Additional reports by Salaudeen Gbolahan
