- Again, the nation's currency, Naira has crashed against the US dollar to close at N595/$1 in the black market recently
- Experts are however worried considering the huge amount of money politicians, aspirants are spending for forms ahead of the APC and PDP primaries
- This development is not a good sign for Nigeria's grappling economy even as the naira has continued to depreciate in the parallel market against the dollar
Ahead of the primaries of the two leading political parties, the All Progressives Congress (APC) and Peoples Democratic Party (PDP), aspirants are mopping up dollars across the country, leading to a further depreciation of the naira.
Daily Trust reports that the dollar has hovered between N550 to N570 in the last two months before it jumped to an all-time high of N595 in the black market on Thursday, May 12.
Naira depreciates against the dollar at investors, exporters window
The Central Bank of Nigeria (CBN) does not however recognise the black market rate, which is far above the N415/$ official rate.
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Findings by Legit.ng showed that the naira has continued to depreciate at the parallel market against the dollar as many people scoop the scarce foreign currency.
It was gathered that many commercial banks are running out of dollars as they are unable to meet many requests from customers. There are fears in some quarters that the exchange rate might climb to N600/$ as the scarcity persists.
Politicians on the prowl
The rush by the aspirants to buy the foreign currency has added pressure on the naira, which has been on the slide for a long time.
Through their agents, the BDC operators said politicians seeking elective offices have been moving around the country to buy the foreign currency, which sources said is much easier to use “to reach out to delegates” and other critical stakeholders instead of carrying big bags.
Legit.ng gathered that aspirants in both the APC and PDP have been moving across the country to woo delegates and meet critical stakeholders of their parties.
Scarcity worsens in May - BDCs
On Thursday, one dollar was exchanged for N595 at the Murtala Muhammed International Airport (MMIA) in Lagos and other parallel markets in the metropolis, especially Ikeja.
Most bureau de change (BDC) operators say they buy the dollar at N585 and N590 and sell around N595.
“When you go to any bank today, the highest you can probably get is $2000,” says a BDC operator, Nasiru, at Allen Avenue in Lagos.
He said the apex bank is only making the dollars available to their “political allies.”
In Abuja, the naira was exchanged for between N591 to N592/$1. Some of the BDC operators who spoke to the newspaper said the demand has spiked from April but got worse this month.
A visit to the popular Wapa BDC market by the newspaper in Kano showed how people were busy going about their normal businesses, but with no element of USD circulating among people.
Speaking to our report, a BDC operator, who asked not to be named, said the dollar price has been rising in the past few days.
The operator said:
“In the last one to two weeks, we sell the dollar at N585 to N587. But suddenly this week it rose to N591, so you can see the changes."
Increased political demand causing scarcity - Gwadabe
In an interview with the newspaper, the president of the Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji (Dr) Aminu Gwadabe, attributed the shading of naira value in the street market to increased political demand, especially with the huge competition for the presidency and other positions.
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“As of yesterday, it closed at N592/$1.
“The naira has been depreciating since April. Of course, during political season, there is usually huge pressure on the naira because politicians share dollars, especially to delegates, key politicians and people of influence."
Experts predict dark days
An economist at the Lagos Business School (LBS), Dr Bongo Adi in a chat with the newspaper disclosed that the situation also happened in 2019 as politicians piled up dollars to pay delegates who mostly demand foreign currencies.
“The delegates see that role as an opportunity to feather their nest."
Hours after announcing closure, APC reopens sale of nomination forms
Less than 24hours after announcing the closure of the sale of nomination forms, the ruling All Progressive Congress (APC) has reopened the sale for interested aspirants.
It was reported that interested aspirants have until midnight on Thursday, May 12 to purchase their nomination forms.
Recall Legit.ng earlier reported that the party had closed the sale of nomination forms for aspirants and the party also made a staggering N2.58bn from the sale of just the presidential nomination forms.