When a currency loses value, people's purchasing power declines as well because products — especially imported ones — cost more money. And when that causes a general rise in prices, it's called inflation.

On 1st June 2023, Daily Trust Newspaper reported that on 31st May 2023, the Central Bank of Nigeria (CBN) sold dollars to bidders at the Importers and Exporters (I&E) window at the rate of N631 per $1.”

This article is to examine in a simple form what a Devalued Naira will mean to the Nigerian Economy, especially on the purchasing power of the masses.

If the CBN devalued naira from 461.6 to 631... it means one dollar equals 631.

It is already a known fact that nigeria imports more than 50% of what she consumes.

Imagine an importer who imports 100 units of an item for 10,000 dollars. That means the importer pays 4,616,000 naira (461.6*10,000=4,616,000) for 100 units of that item.

With devaluation of the naira to 631, that same importer will pay 6,310,000 naira (631*10,000=6,310,000) to import same 100 units of that item.

And you expect the importer to sell at the old price ?

The bottom line is that the importer will pay more naira for a dollar, and the final consumer will pay more naira to purchase that item from the importer. Don't forget that salaries still remain the same, even the so-called minimum wage cannot full my fuel thank.

These are some of the items nigeria imports:

Steel, Textile, Plastics, Cereal, Glass, Metal, Fertilizer, Cotton, Silk, Cork, Sugar, Wheat, Woven fabric, Motorcycle, Copper, Electronics, Nickel, Petroleum, Iron.

Finally, devaluation reduces the cost of a country's exports, rendering them more competitive in the global market, which, in turn, increases the cost of imports. If imports are more expensive, domestic consumers are less likely to purchase them, further strengthening domestic businesses. But over the years, the CBN had on different occasions devalued the naira but I am yet to see where it actually strengthened domestic businesses.

What does Nigeria produce, that can replace her import, nothing except raw materials which are largely exported to industrialize nations.

Did the government set up any import substitution industries that will compete with their foreign counterparts, Buhari killed the only ones left with his bad policies.

The devalued naira and removal of fuel subsidy without palliatives is to further improvised Nigerians.

They should print out more currency notes to lubricates it properly

They should find a better way of addressing the economy, because when ever the cost of dollar or fuel increases, the average retailer on the street increases his own stock immediately to avoid beign left out

They should add more notes to avoid stifling out the economy, though talking of business people, salary earners are usually at the receiving end

criuze:
They should print out more currency notes to lubricates it properly

They should find a better way of addressing the economy, because when ever the cost of dollar or fuel increases, the average retailer on the street increases his own stock immediately to avoid beign left out

They should add more notes to avoid stifling out the economy, though talking of business people, salary earners are usually at the receiving end

Hahahahhahahah