For the very first time in the history of Nigeria’s economy, the Naira hit a record low of 600 naira per dollar on the black market, increased political spending on election primaries hit the currency hard.
The
two major political parties, the ruling All Progressives Congress, (APC) and
the Peoples’ Democratic Party (PDP) political parties are expected to pick
presidential candidates by June 3, according to the Independent National
Electoral Commission, (INEC), while official campaigning will begin in
September 2022 ahead of elections early next year.
In
the bid to please party delegates, the political aspirants had to scoop huge
funds that cannot be carried in Naira, exchanged them for dollars to serve the
delegates in the bid to secure party tickets.
According
to reports, the aspirants are competitively bidding for their respective
tickets at all levels, but the battle for the presidential ticket is the major
factor affecting the money market. While some aspirants have made provision to
pay as much as 10 thousand dollars for delegates of over 7 thousand, others are
willing and prepared to double the sum, so as to lay hold of the party flag for
the presidential elections.
The
currency has been weakening sharply on the unofficial market since 2020.
However, it has been stable on the official market, trading within a range of
413 to 417 naira due to dollar shortages. Barely a week before the party
primaries, all the commercial banks in Abuja and Lagos fell short of dollars
and customers, businessmen and students could not complete meaningful
transactions. Almost all businesses were on standstill, especially those that
depend on forex to execute their businesses.
Some
customers found under the category of diaspora remittance recipients have been
denied access to funds sent to them by their families and friends abroad. Some
economists also blamed the CBN’s demand-side economics as a major culprit.
Demand-side economics, in this context, deals with the method of focusing too
much attention on the management of demand for dollars, rather than on earning
it.
While
no aspirant has openly admitted to sharing dollars to delegates, the practice is
believed to be commonplace in the nation’s electoral process.
A
bank customer who spoke to City People anonymously lamented how she was unable
to complete an international transaction because the bank had kept her in queue
for over three weeks and the expected payment she intended to make was not
completed. While the official exchange rate on the website of the Central Bank
of Nigeria remained at N415.58/$ as of Friday, former governor of Anambra state
and a presidential aspirant, Peter Obi also expressed worry over the
diminishing value of the naira.
Obi,
who was a guest on the ‘Morning Show’ on Arise Television, while speaking on the
decreasing value of the nation’s currency on the parallel market, said one of
the most important ingredients of a nation was the respect people have for
their currency.
“Currency
is the measure of faith and trust of citizens of a nation, it is the measure of
productivity. It is very worrisome that government officials who are supposed
to be the protector of our local currency have abandoned the currency and are
now spending dollars.
“I
find it worrisome that while our manufacturers, business people are not getting
dollars to bring in critical goods into our country, the politicians have
enough dollars to share and these people are those who have no legitimate means
of earning this dollar,” he said. Obi lamented that the country’s politics has
remained largely transactional.
Nigeria’s
two major political parties, the ruling All Progressives Congress (APC) and the
main opposition, the PDP, plan to hold primary elections to decide legislative,
governorship and presidential candidates from the weekend to early June.
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