Black Market Traders Make Millions as Naira crashes to N592/$1, Now 4th Worst-Performing Currency In Africa

Black Market Traders Make Millions as Naira crashes to N592/$1, Now 4th Worst-Performing Currency In Africa

  • The dollar shortage at the foreign exchange market is opening up big opportunities for black market traders
  • On Wednesday some black market traders in Lagos exchanged a dollar at the rate of N592 compared to the N416/$ at the official market
  • Since the beginning of the year, Naira's performance has been ranked among the worst in Africa

Nigerian currency has continued its free fall at the black market and it is now trading at N592 to a dollar.

The black market rate is a N174 difference gap when compared to the official rate of N416.2 to a dollar posted by the Central Bank of Nigeria on its website.

The huge gap and the lingering forex has provided a window of opportunity for black market traders to smile home in millions.

Black market, currency, naira Africa
A currency dealer uses a mobile phone as he counts bundles of Nigerian naira banknotes for exchange on the 'black market' in Lagos, Nigeria. Credit: Photographer: Tom Saater/Bloomberg
Source: Getty Images

The Punch reports that frustrated manufacturers and travellers are now been forced in the last few weeks to patronise BDC operators more often than before due to dollar shortages.

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The Chief Executive Officer of Financial Derivatives Company, Mr. Bismarck Rewane, had in January projected that the CBN would devalue the naira by the end of 2022, the Guardian reports.

According to Rewane, CBN will spend between $8 and $10 billion to defend the naira which he believes would drag the country’s gross external reserves to between $30 and $32 billion by end of 2022.

Naira against other African currencies

Meanwhile, Naira has been ranked the fourth worst performing currency in Africa Ripples Nigeria reports.

South Africa is the best performing currency while Ghana Cedis is regarded as the worst.

The report quoted Bloomberg report that the value of Naira since the start of the year has dropped in value by 0.82 per cent and sits at 12 positions among 15 currencies surveyed.

South African rand the report showed has increased in value since the start of the year by 4.56% followed by the Namibian dollar 4.49%.

Botswana pula, Uganda shillings and Egyptian pounds are ranked 3rd, 4th, 5th best performing with a value increase of 1.76%, 0.84% and 0.02%.

Naira performance black market
African currency performance since the start of 2021. Credit: Bloomberg
Source: Facebook

Banks to start paying customers in coins had earlier reported that while Nigerians are still confused about what happened to the eNaira project, Lawmakers have instructed CBN to enforce the use of coins for transactions

Coins are part of the Nigerian currency, the structure comprises of three coin denominations (50k, ₦1, and ₦2)

The lawmakers have therefore instructed CBN to ensure Nigerian banks start issuing coins to Nigerians


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