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The black market was never the problem.
Aboki was there when dollar was 180.
BDCs were there when dollar was 200
Nigeria has been an importing nation even when dollar was 200. Naira is not crashing suddenly because we are import dependent. We have been import dependent for as long as I can remember.
The real cause of this recent crash is bad Fiscal policy.
The federal government is trying to divert attention from its foreign exchange policy failures by clamping down on forex dealers. Taking a clue from Jerry Rawlings policy where he attempted to force retailers to bring down the price of commodities by using military to intimidate them but ended up causing more market chaos because retailers had to hoard the more, made the commodities scarcer and worsened the price.
First of all, it is the Federal Government that created this black market because if forex is accessible in banks, the black market will die a natural death.
At the official market, dollar is 400+ but nobody is talking about it because they don’t get their dollars there.
It was the same CBN that restricted access to dollars from $200 to $100 to $20 a month on your naira card. Some banks have even stopped completely. What do people do when they need even the tiniest dollar, they go to the black market. A friend wanted to buy a product of $48 yesterday, she couldn’t with her bank card. She had to source for it in the parallel market. Imagine the number of persons looking for dollars at the parallel market from tiny to huge amounts because they can’t get them through the banking system ? Why won’t black market thrive ?
Naira is not crashing just like that. Everytime there is a crash. Check very well, the CBN must have introduce a new policy. You cannot cheat the market. CBN through its policy puts undue pressure on the naira. They are the chief promoters of panic in the market place. They are the reason why there are hoarders.
How can you as a responsible Government announce that before the end of the year, you will cut some access to dollars and then you expect people not to hoard ? How can you wake up one morning and declare a currency design change in such a way that people are skeptical about the utility of the naira notes in their hands and you expect them not to source for a stable alternative ? How can you make it difficult to access dollars and then you are currently trying to arrest BDC operators that provide alternative and expect the price not to go up ?
Black market will become blacker if this thing continues. The harder it is to access, the higher the price in an available alternative market. You cannot cheat the market. You cannot erase rational economic behavior.
©️ Caleb Onyeabor
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