The Dollar-Naira Valuation: What Nigerians Don’t Know

<p>&nbsp&semi;<&sol;p>&NewLine;<p><em>The Dollar-Naira Valuation<&sol;em><&sol;p>&NewLine;<p><strong><a href&equals;"https&colon;&sol;&sol;openlife&period;ng&sol;">OpenLife Nigeria<&sol;a><&sol;strong> reports that since the Central Bank of Nigeria Governor&comma; Mr&period; Godwin Emefiele&comma; publicly attacked and pointedly accused Aboki dealers in Foreign Exchange&comma; <em>abokifx&comma;<&sol;em> as responsible for the dwindling fate of the Nigerian Naira&comma; many public affairs analysts have offered different perspectives into the raging controversies&period;<br &sol;>&NewLine;In some important respects&comma; while the government points at sabotage as a reason for the low value of its currency against <strong>the<&sol;strong> dollars&comma; stakeholders&comma; on their part&comma; have never failed to remind the government of its myopic economic direction&comma; a development that accounts for the free fall of the Naira&period;<br &sol;>&NewLine;Besides&comma; seasoned economists have also accused the government of sloppiness in procedural integrity&period;<br &sol;>&NewLine;However&comma; as the International Monetary Fund and World Bank demand deeper reforms&comma; Nigeria’s central bank has devalued the naira’s official rate twice last year and has weakened the exchange rate for retail users&comma; limiting dollar access for imports and implementing restrictive forex policies to support the naira&period;<br &sol;>&NewLine;In the face of all this&comma; Rabiu Lawan&comma; on Friday opened a fresh vista on the fate of Naira and its celebrated worthlessness&period;<br &sol;>&NewLine;In a piece titled&OpenCurlyQuote;&dollar;1 VS N500 Brouhaha&comma;’ Lawan maintained that the lamentation over the value of Naira especially in exchange for the dollars is misplaced&period;<br &sol;>&NewLine;According to him&colon;<br &sol;>&NewLine;1&period; N500 can buy me 2 square meals in Nigeria but &dollar;1 can&&num;8217&semi;t buy you a meal in the US&period;<br &sol;>&NewLine;2&period; N500 can buy me a 1&period;6gb worth of data in Nigeria but &dollar;1 can&&num;8217&semi;t buy you a 250mb of data in the US&period; T-Mobile charges N32&comma;500 for a 30gb of data&comma; AT&amp&semi;T charges N37&comma;500 for a 30gb of data&comma; <a href&equals;"https&colon;&sol;&sol;www&period;vanguardngr&period;com&sol;">Verizon<&sol;a> also charges N40&comma;000 for the same 30gb of data in the US&period; Glo charges me N10&comma;000 for 50gb and MTN charges me N10&comma;000 for 40gb of data&period;<br &sol;>&NewLine;3&period; A 75cl bottle of water in Nigeria costs an average N100&comma; a 55cl bottle of water in the US is &dollar;1&period;45 which is N725&period;<br &sol;>&NewLine;4&period; The most expensive place to live in Abuja is Aso Drive&comma; a single room costs N400&comma;000 per month&comma; the same room goes for N350&comma;000 in Lekki all in Nigeria&period; Same room in Manhattan&comma; New York City goes for N1&period;8 million per month&period;<br &sol;>&NewLine;5&period; N500 can buy me a dudu osun bathing soap and a Vaseline for the harmattan season&comma; &dollar;1 can&&num;8217&semi;t do the same in the US&period;<br &sol;>&NewLine;6&period; N500 can buy me 3 litres of fuel in Nigeria&comma; &dollar;1 can only buy you 1&period;3 litre of fuel in US&period;<br &sol;>&NewLine;7&period; It cost an average of N180 daily to earn a degree in Nigeria&comma; it cost an average of N1&comma;650 a day to earn the same in the US&period;<br &sol;>&NewLine;Responding&comma; Yahaya Sanni&comma; an Obafemi Awolowo University graduate who currently plies his trade in the United States concurred with Rabiu Lawan’s submission but slightly disagreed with him at the realm of Consumer Price Index&comma; CPI&period;<br &sol;>&NewLine;Speaking to OpenLife on Friday afternoon from the US&comma; Yahaya Sanni noted that<br &sol;>&NewLine;&OpenCurlyDoubleQuote;A dollar shouldn&&num;8217&semi;t exchange for anything less than N2000 if Nigerian economy must progress<br &sol;>&NewLine;&OpenCurlyDoubleQuote;The only part of the analysis I have a problem with is number 4&period; This is because the standard of living in Manhattan and Aso or Lekki vis a vis infrastructure cannot be compared&period;<br &sol;>&NewLine;&OpenCurlyDoubleQuote; However&comma; despite N500 having a higher purchasing power than &dollar;1&comma; the ease at which &dollar;1 can be made is far easier than N500&period;<br &sol;>&NewLine;&OpenCurlyDoubleQuote;Now&comma; that&&num;8217&semi;s the problem with the economy and not with the value of the currency&period;<br &sol;>&NewLine;&OpenCurlyDoubleQuote;If I were to advise Nigerian government&comma; I would say&comma; devalue the naira even more&period; Allow<em> aboki fx<&sol;em> to raise the exchange rate of the dollar to about N5000 and ensure that dollar is completely scarce in Nigeria&period;<br &sol;>&NewLine;&OpenCurlyDoubleQuote;That way&comma; local contents can spring up&period; For instance&comma; a leather belt in the US is worth about &dollar;30&period; It is the same quality as those made in Aba&comma; Abia State&period; &dollar;30 is about N15&comma;000&period; Am not sure there is any Aba-made leather belt that&&num;8217&semi;s worth over N10&comma;000&period;<br &sol;>&NewLine;&OpenCurlyDoubleQuote;So if the dollar is N5000&comma; &dollar;30 will be N150&comma;000 which would buy a lot of locally made products in Nigeria&period;<br &sol;>&NewLine;&OpenCurlyDoubleQuote;And that will discourage people from over-dependence on foreign goods and encourage local production&period;<br &sol;>&NewLine;&OpenCurlyDoubleQuote;However&comma; the CBN can still exchange dollars for N400 for those that genuinely want to import raw materials that cannot be found in Nigeria or machinery&period; That is the only way Nigeria will survive&comma;” Yahaya asserted&period;<&sol;p>&NewLine;<p>&nbsp&semi;<&sol;p>&NewLine;