The Oasis Reporters
March 29, 2020
With a mono economy like Nigeria’s own that relies heavily on the sale of crude oil which accounts significantly for it’s foreign exchange earnings, pundits had predicted that a shock would await the country should any untoward event occur on the global scene.
With the ongoing coronavirus pandemic showing no signs of a let up and inflicting economic woes on nations across the world, Nigeria’s apex bank, the Central Bank of Nigeria (CBN) has devalued the naira.
In a communique to all banks and Bureaux de Change (BDC) last week, the apex bank advised that the BDC to end-user sales of the dollar should not be more than N380/1USD.
This is up from the previous N360/1USD and is the highest official exchange rate between the dollar and naira in over two years suggesting a defacto devaluation.
But it might be worse. Heavy users of crude oil continue to shut in most sectors of their economy, while workers are advised to stay at home and streets all over Europe, the Americas, Asia etc, are deserted.
Therefore when many factories are shut, no fuel is thus used. Oil watchers say ports are congested and cargo liners holding hundreds of thousands of barrels of crude oil remain on the high seas, chalking in demurrage charges with no buyers in sight.
That is Nigeria’s current dilemma, besides the worsening health challenge.