The issue boils down to a fundamental economic principle: supply and demand. In simple terms, when demand exceeds supply, prices rise. In Nigeria’s case, the demand for dollars surpasses what the country earns from exports, assuming there are any exports in 2024…lol
Take Canada, for instance; they export to various countries, including the U.S., earning foreign currency. This revenue from exports helps offset some of the demand for dollars needed for imports or other use. However, Nigeria doesn’t generate as much foreign currency from exports, leading to a perpetual shortage of available dollars. Consequently, prices surge.
The fluctuation in exchange rates, with rates dropping one week and soaring the next, results from temporary government interventions to control the situation. However, a sustainable solution lies in exports (earning fx), as this would naturally regulate the availability of foreign currency in the market.
Wishing Nigeria the very best from the abroad!
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