The Economic and Financial Crimes Commission (EFCC) has rejected the plea bargain offer proposed by a former minister of the Federal Capital Territory, Ms Jumoke Akinjide. According to EFCC’s lawyer, Nnemeke Omenwa, the agency would instead proceed with the trial. At the last sitting of the court on February 6, the EFCC had admitted to…
By Job Osazuwa
The Naira has been in the news in the last two years, for the wrong reasons. It had steadily slumped against the US Dollar at the parallel market. But, recently, it coughed and jerked back to life sending panic in the camp of the bureau de change operators.
Exchange rates may seem like a bit of an abstract concept, but they actually affect everything, everybody, including those who deal directly in the international notes and coins. No doubt, exchange rate has literally become a sort of living thing itself that has breath, breathing on everybody and all economic spheres. Irrespective of one’s economic or social class, the naira versus other currencies has a way of impacting on life.
In recent times, the fluctuation characterising the market has made it even more difficult for the operators to remain in business. The business, as gathered, has logically become a game of trial by error. Some financial experts described it as occupational gambling, while others simply painted the scenario as a tornado that has the power to make or mar any operator. This is dependent on the upward or downward swinging of the exchange rate pendulum.
Every part of Nigeria, from Delta to Sokoto and Lagos to Ebonyi, the market space of buying and selling foreign currencies is unarguably dominated by the northerners. At local and international airports, major shopping malls, big hotels and other strategic locations across the country, you will certainly find these northerners transacting the business effortlessly.
One might be tempted to conclude that it is their birthright. Indeed, from time immemorial, they have been accepted as masters of the game and undefeatable lords in the ring of buying and selling forex. Well, the story appears to be changing, and so dramatically. The Naira has suddenly gained some vigour and seems to be recuperating in high speed, but the operators who had much of the hard currencies in stock, with the hope that it would continue to appreciate, are gnashing their teeth.
The reporter went to different forex business centres in Lagos to find out from the local operators how they have been faring in recent times, especially as the exchange rates seem to be dancing the samba dance at the parallel market.
Alhaji Abu Sani does his business at shop 41, TKB Shopping Complex, Idiroko Road, Sango bus stop, Ogun State. He didn’t hesitate in revealing that things had fallen apart in his cherished business, which he inherited from his late father. He said operators’ woes have been deepened with the sharp fall in the price of foreign currencies.
“Many of us were affected because we didn’t expect it happening so soon. The rate at which the price went down came to us as shock. It is unusual. If value is depreciating, naturally, it happens as two or three naira difference, but we had about 20 Naira difference a day on Dollars. From 520 to one Dollar, it became 430 within nine days,” he said.
Alhaji Gado Garba was formerly at Shop 4, Jimy Agbaje Shopping Complex, which gave way to the flyover bridge being constructed at Abule-Egba bus stop. He described the situation as rather unfortunate for him and his household, lamenting that feeding had become difficult due to the tough times his business is facing. According to him, in the past, he could brag of the likely profit he would make within a week. However, he said everything has changed in the last one year, and became worse in the past three weeks since the Naira began to appreciate against foreign currencies, especially the dollars, euros and pounds.
“It is now very difficult because if you buy a dollar today, tomorrow it becomes lesser. If you sell it, which is running at a loss; if you don’t sell it, it might continue to depreciate.
“The situation was a bit better when it was increasing everyday. In that case, you were sure of making profit anytime you sell, but you need to borrow money to add to your capital to buy another one. That was also a challenge to many of us who don’t have billions to run the business. It is a simple mathematics, when you were buying for two hundred Naira to one Dollar; you needed one million Naira to buy five thousand dollars. But when it rose to above five hundred per dollar, then, you needed almost three million to remain in business. Some of my brothers (colleagues) in the business couldn’t buy any longer. They were just watching and hoping that the price would reduce some day,” Garba said.
At the popular Alen Junction, Ikeja, Lagos, the story is the same. The dealers were there and in their numbers, they spread themselves around the relocated Alade market, wooing customers to come and buy or sell foreign currencies.
When the reporter visited the market and feigned an interest to exchange some dollars. In a competitive manner, three of the dealers swarmed around him, and in a matter of a minute, one of them succeeded in ushering him to his small shop occupied by other two dealers. And a conversation was later struck after the reporter’s inquiry.
The dealer, Alhaji Mohammed M. revealed to the reporter how he lost almost two million to the sharp decrease in the last three weeks. But he didn’t seem disturbed by the huge loss. He said Allah knows the best and controls all financial situations, including his profit or loss.
He stated: “We can’t run away from the business because things are tough at the moment. I thank Allah because I didn’t borrow the money l lost. When it was good, we were enjoying it, so if it is bad, we will also endure it. Moreover, nothing lasts forever.”
Alhaji Yakubu Ibrahim, whose shop is at 44, Sakpoba Road, Benin City, Edo State, spoke to the reporter on the telephone, and lamented that he had not witnessed such a fluctuation and high risk since he started the business 22 years ago.
“I have no other business doing; otherwise, I would have abandoned this trade. You can’t tell what will happen to the price in the next one or two days. At times, you buy and may want to speculate a possible increase so that you make more profit, but there could be sharp fall that could result in over a million naira loss overnight. It didn’t start today, but then, one could forecast and mostly got it right. At the moment, the story has changed because the government is not stable with its forex policies.”
Ahmadu Abdul expressed the belief that it is only government that could bring sanity to the market. According to him, if the government releases sufficient hard currencies, especially dollars into the system, it would automatically force down the price in the open market.
On how quick things could be stabilised, knowing that the Naira was also slightly weakened in the last few days, he said it would take a while for the economy to bounce back to normal. Therefore, he charged the government to move the economy forward, by curtailing the rate of imports and look inward to see how they could build the non-oil export sectors to earn more foreign exchange.
Other traders have expressed hopes that the strengthening of the Naira would reposition the economy for greater productivity. They also appealed to the Central Bank of Nigeria (CBN) to sustain the liquidity boost in the market so that the Naira could further sustain its gains against the Dollar.
CBN has explained that the Naira was gaining against major international currencies in the foreign exchange market in recent weeks due to its decision to deepen its intervention in the market.
At Allen junction, Alhaji Saeed Adamu, who said he had been in the business for 25 years, told the reporter that the bureau de change plays a crucial role in the financial system by providing Dollars to business travelers and others for different purposes.
Therefore, the graduate of Economics tasked the apex bank to relax some of its forex policies for scarcity of forex to reduce and make exchange rate relatively stable. He further pleaded with the Federal Government to as well release more foreign currencies into the market to curb scarcity and unnecessary hoarding.
“I am not happy the way Dollars is going up. The little profit I was making before was okay for me and my family. But prices of things are going up now in the market and the Naira is almost useless,” Adamu said.