FX Crisis in Nigeria worsens as Black market exchange rate rises double the official exchange rate

By: Damian Okonkwo

The Foreign Exchange (FX) scarcity in Nigeria has worsened to unseen levels since the history of the country in November with the Naira exchange rate to the US dollar at the black market falling to N900/1$ on over the weekend.

This equals a double increase when compared to the official exchange rate at the Investor's and Export (I&E) window currently exchanging at N440/$1 as at Friday 4th November 2022.

Similarly, the exchange rate for other foreign currencies at the black market fell to new lows. The British pounds for instance were exchanged at N1000/£1 at the black market, while Euro was exchanged at N870/€1.

Many have blamed the continuous devaluation of the Naira on the current CBN policy to change the major Naira notes by year-end. Thus, many who have been hoarding the old currency have been compelled to exchange them into foreign currencies creating more demand for the US dollar at the black market.

Judging from the look of things at the black market today, one would reckon that the dealers at this market seem unregulated as they set the rate at will based on the increasing demands.

Added to this, the failure by commercial banks to provide enough FX for their clients has further channeled the demand to the black market.

At present, the rate seems to be increasing every week and many fear it might attain N1000/$1 by December when the demand for FX will further increase due to the Festive season.

Many locally based companies in Nigeria and other small business enterprises within the country now find it very difficult to survive and are unable to obtain the raw materials for their productions due to increasing costs.

The unemployment rate and hardship within the country presently is one unforeseen for decades now.