Nigeria’s currency crisis is decades in the making (2024)

FAQs

What is the currency crisis in Nigeria? ›

The 2023 Nigerian currency crisis was precipitated by a shortage of cash currency (the naira) and an attempt by the Nigerian government to force citizens to use a newly created government-sponsored central bank digital currency. This led to extensive street protests in mid-February 2023.

Salami added that the naira, along with other African currencies, is facing pressure due to increased domestic demand for dollars, particularly to cover the costs of importing raw materials and commodities, including oil.

1 USD = 1,488 NGN Jun 23, 2024 03:19 UTC

Check the currency rates against all the world currencies here.

Financial experts have attributed the recent gains of the naira to the ongoing reforms by the government after the local currency, on several occasions within the first quarter of the year, plunged to unprecedented lows.

Nigeria's average salary range ranges from 85,700 NGN per month (USD 198.43), the lowest average, to 1,510,000 NGN per month (USD 3,496.24), the highest average.

Alongside soaring inflation and a plunging currency, Nigeria is also battling record levels of government debt, high unemployment, power shortages and declining oil production — its main export. These economic pressures are compounded by violence and insecurity in many rural areas.

With a GDP estimated at $477 billion in 2022, Nigeria is at the top of the ranking of the richest African countries, ahead of Egypt and South Africa.

Simply nothing. As a matter of fact, we don't have One Naira currency, like the United States have One Dollar currency. So there's nothing you can buy with One Naira here in Nigeria.

Currency depreciation has increased import costs. Nigeria is an import-dependent economy, and Nigerian importers are purchasing goods at prices that are already very high abroad. The costs of these goods have also gone up because of higher tariffs caused by the depreciation of the naira.

What can 2000 naira buy in Nigeria? ›

WHY IS THE NAIRA PLUMMETING IN VALUE? Under the previous leadership of the Central Bank of Nigeria, policymakers tightly controlled the rate of the naira against the dollar, thereby forcing individuals and businesses in need of dollars to head to the black market, where the currency was trading at a much lower rate.

Goldman economists, who predicted in February that the naira would strengthen to 1,200 per dollar during 2024, now see it potentially advancing beyond that level after a raft of measures by the central bank.

NGN to USD for the next 6 months

The NGN to USD forecast for the next 6 months is that the NGN to USD rate will decrease by -18.79% and hit $ 0.000547.

There are many factors fueling Nigeria's debt crisis, the main one being fiscal mismanagement. The Nigerian government lacks fiscal discipline. The Fiscal Responsibility Act of 2007 clearly stated that the government at all levels might borrow only for “capital investment” and “human development”.

A currency crisis is defined as a speculative attack on the foreign exchange value of a currency, resulting in a sharp depreciation or forcing the authorities to sell foreign exchange reserves and raise domestic interest rates to defend the currency.

“Disruptions in the non-oil economy, currency volatility, spiking inflation, higher fuel and transport costs, and food shortages should remain issues throughout 2024, while mounting price pressures, policy uncertainty, and softening consumer spending dampen economic activity and growth,” Scribante said in a research ...

Key Highlights. Nigeria's public debt stock which includes external and domestic debt stood at N87. 38 trillion (US$113.42 billion) in Q2 2023 from N49.