By Faith Omoniyi
In recent times, Naira has been defined by its continuous downward spiral. The Naira has plummeted from $1/N198 to $1/N430 in the parallel market during the last six years. This increase equates to a 209% depreciation. The depreciation is due to a reduction in global oil prices, a lack of foreign currency income, and higher inflation in the country. The downward trend of the Naira is set to continue if proper economic measures are not in place. Increasing Nigeria’s export potential and reducing the inflation rate are viable options for getting Naira back on track.
Overbearing
weight on Oil
Low export potential is one of the causes of the Naira’s depreciation.
According to the National Bureau of Statistics (NBS), in 2021, Nigeria’s
imports exceeded exports by N1.94trn. Nigeria’s foreign exchange earnings are
derived primarily from the export of petroleum. However, Nigeria still spends
$14.95 billion on the import of petroleum products annually. Nigeria needs to
build refineries to shelve this figure or collaborate with private companies
like Dangote and BUA that are building refineries.
