On 29th May, 2015, President Muhammad Buhari was sworn in as President of the Federal Republic of Nigeria. On that day, the American Dollar was selling on the international market for 181 Nigerian Naira (NGN). Today, seven years later, One American Dollar is worth 710 Nigerian Naira. This is more than 500% negative increase and it clearly shows how much the Nigerian Economy has retrogressed under the current administration.

From an economic point of view, Nigeria’s Central financial regulator, the Central Bank of Nigeria insists on having a fixed exchange rate while she maintains her own independent monetary policies and still demands a free flow of capital between the nations she does business with. This is laughable at best. It is a brilliant economic example of an Impossible triangle which cannot succeed.

What many financial analysts regard as the primary reason for the hike in forex rates is that Nigeria is a net importing nation. Nigeria’s major source of foreign exchange is the South’s crude oil which constitutes about 79% of the country’s net export according to the Central Bank of Nigeria.

This situation now creates a demand for foreign exchange which the Central Bank of Nigeria cannot meet. When the demand and the supply is improperly balanced in this way, the price will rise.

It is also appalling for a country that depends on crude oil export for a huge percentage of its foreign exchange that the Nigerian National Petroleum Commission (NNPC) has made “ZERO” remittance into the Federal treasury due to the global hike in crude oil and renewable energy prices since last year.

Zero petrodollars paid into the Federal Coffers is a very unsustainable way to run a country that is hugely dependent on petroleum money to stay solvent.

The rising security concerns in the country also contributes to this financial debacle. The scourge of kidnappings, armed robberies and blatant terrorism/banditry has discouraged the inflow of dollars through any foreign investments in this nation. As a result of concerns over the security situation in the country, some leading corporations are closing down their offices and pulling out of Nigeria. Oando Energy recently announced that it will withdraw from the country in phases while Exxon Mobil announced that they are selling off their assets in Nigeria to Seplat Energy.

Twitter Inc. recently chose Ghana over Nigeria to set up their West African headquarters. These are but a few companies that are shrinking away from investing in Africa’s supposed giant.

There are also rumours of the incentivization of party delegates of Nigerian political parties with dollars. From a moral standpoint, that singular act has corrupted what is supposed to be a free and fair electoral process to replace the backward thinkers who make financial decisions for the country.

From an economic standpoint, introducing such an amount of forex to the black market in such desperate times will only negatively influence the price of dollar.

At this rate, Nigeria’s forex market is nosediving at breakneck speed with glaring negative consequences that will shake the foundations of what was once Africa’s fastest growing economy just 40 years ago. The Naira is an abandoned patient with an IV line that is about to run dry.

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