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.