Picture: Meredith Kohut for the New York Times
Venezuela has the biggest oil reserves in the Americas. They made billions of dollars from the sales of oil and its products globally especially to the USA. Today, things are bad in Venezuela. Grocery stores don’t have enough food. Hospitals don’t have basic supplies; like gauze. Child mortality is spiking. Businesses are shuttering. All these was because of a bad economic decision made by the government, which spiralled into something worse and ongoing till date.
Nigeria like Venezuela depended on her oil products for their foreign exchange into the currency and to service the bulk of her populace. Since the slash of oil price in 2014. Nigeria has hit rock bottom. As at today (December 2016), Nigeria is officially in a recession. We know one of the reasons is because of lack of foreign currency in the country. Since the price of oil has been halved, the government barely have enough to service the economy and hardly enough to sell to the business men. Hence, leading to the scarcity of dollar and ultimately pushing people to source foreign currencies in the black market.
Prices of groceries and household essentials are upwardly trending, as the businessmen who succeeded in acquiring foreign currencies to import products, sell them at a premium price. It’s still an ongoing situation as of today, and no resolution to this in the foreseeable future unless YOU do something to help the situation. Nigerian inflation rate hit 18.20% in October 2016 and still forecast to even go higher. That’s the highest rate since October 2005, according to data on the Central Bank of Nigeria’s website. Nigeria is in a real economic downturn, and the lower to middle-class citizens feel this pressure the most. Wages remained unchanged while the value of Naira is watered down by the day.
Nigeria needs dollars in Nigeria! One of the ways to get these foreign currencies is if money transfer companies or operators send their dollars to Nigeria through the right channel. Unlicensed money transfer businesses cut corners and offer “high rates” for their selfish reasons. The reason is because they take their foreign currencies to the “black market” in Nigeria to exchange. These currencies are sold at a ridiculously expensive rate to the business men who need them to transact overseas, they end up purchasing products to be sold at very expensive prices to Nigerians. This “merry-go-round” effect will not help Nigeria out of recession, at least not anytime soon.
You may think you are not affected in any way because you are “lucky” to be getting naira at a high rate but you are now a participant in illegal money transfer which fosters inflation in Nigeria and further worsens the economic condition in Nigeria. You also put yourself and loved ones at risk by engaging in illegal money transfer operations.
However, the licensed remitters send their dollars to Nigeria through the Central Bank of Nigeria. The CBN buys the dollar at an official rate and releases the dollar to the bank for businessmen to purchase.
Currently, it is still challenging for people in Nigeria to obtain foreign currencies for business, studies or personal use. This can change if you send money the right way to Nigeria and encourage everyone around you to do the same. This will help increase the availability of foreign currency in Nigeria, in addition to other means by which the government is acquiring their foreign currencies.
Here is a list of licensed operators as released by the Central Bank of Nigeria; https://www.cbn.gov.ng/Out/2016/CCD/Press%20Release%20on%20Illegal%20IMTSOs.pdf
Unlicensed MTOs do not care about the economic conditions in Nigeria. They just want to profit at the expense of the Nigerian economy. Let’s all do the right thing and send money the right and legal way.