A critical analysis of reason for depreciating value of Naira to Dollar

By Gbolabo O.

It is a fact that appreciation and depreciation of currency is not related to race or color or who is the president be it Hausa, Igbo or Yoruba. It is basically about production of goods and services and the demand of your products in the world market. 

For instance, a country that produces almost nothing will never meet up as policies only control your currency not the value of another countries currency against yours. 

A country where over 500 industries were closed within 30 years must not complain of depreciation of her currency. 

In a country where someone can carry over $2billion just for sharing is already a doomed one in terms of monetary policy and value. 

When a country favours importation over local production, it is already a big problem because in that way employment is created for another country while her own citizens get no jobs. 

A country that exports all raw materials without adding value should not lament of depreciation of currency.

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It is very wrong to export raw materials and re-import finished products. For example, a bag of cocoa will go for like N1 million naira but when it is processed it will worth around N7million.  Even farmers who produced raw cocoa may not even be able to buy chocolate. 

If a country deliberately operate a banking system that gives loans to importers at the expense of local industries, such a nation is already in trouble and should not complain about depreciation. 

A country that give loans in billions to agric sector without monitoring & evaluation of such loan on how it gets to the real farmers is in trouble. Like someone who collected over N2 billion agric loan, he bought a jeep, built a nice house and use the rest to import processed pork. Meanwhile, local pork farmers are dying here. Is that not a double tragedy, stressing forex at the same time killing local industries. 

A country that spend more on few privileged politicians at the cost of the populace who are unemployed should not talk about money depreciation. 

A country where it is difficult for investors to register businesses because of the governent officials demanding for bribe. Right from airport, to hotel, to minister to governors investors will bribe, all these are part of cost of investment. A friend brought investor on estate development just for the state commissioner in charge to demand 30% of the investment. To see the governor in a state will cost you N2 million as bribe before you can be scheduled. This is a state as poor as anything. 

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A country where the cost of travelling for treatment abroad by officials will build world class hospitals should not talk about naira against dollar parity. Money taken to that trip is part of stress on forex. 

A country where few people have access to federal reserve and those few can get loans are not because of what they can produce but the connection they have, is that not a big problem?

A country where we import what we produce because it’s cheaper over there is playing with fire. 

A country that has arable land, teaming idle youths and still complain of hunger should not talk about currency depreciation.

A country where free money flows can never control inflow and outflow of forex. Imagine someone who wants to hide his loot went to Aboki to buy dollars worth $50 million just to hide it in the basement of his house. That money has no economic value yet it deprived those companies that need it to import raw materials, those companies go to Aboki to buy at exorbitant price.

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A country where banks are involved in round tripping and inflated cost to siphon money is doomed.  A company wants to import caterpillar worths $50,000. A bank made the forex $550,000 meanwhile no caterpillar was imported at last yet the money faded into private accounts. Who strain forex in that case?

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