Nigerians losing confidence in naira, prefer to keep dollar – ABCON President

In this interview with NIKE POPOOLA, the President, Association of Bureaux de Change Operators of Nigeria, Alhaji Aminu Gwadabe, speaks on foreign exchange challenges and solutions, among other issues

Naira value has fallen significantly at the official and parallel markets. What is responsible for this?

You know, in every operation in each market, there is a season. So, this is a season of naira attrition in retrospect. Election year comes with pressure on that naira, which is why we have seen that premium exists between the official and the unofficial markets. On a fundamental basis, you know, this is just like a symptom, not the cause. But partly, you know in Nigeria, there are very many factors that really put structural disequilibrium in the foreign exchange market. Nigeria is a monoculture economy. It is a one-product economy, where the productive activity is very, very low.  This is coupled with poor infrastructure and capabilities. This impacts the currency, the foreign reserves too. When you have a source of foreign reserves that is not diversified, tell me how the reserves will not fall? How will they be so strong to actually stand any pressure on the naira? In terms of oil revenue, oil is going up but why should our local currency be this way?

The reason is that we are import-dependent. So, as we gain inflows of dollars, we lose in outflows of naira. You see, at the end of the day, we are back to square one. That is why we are not seeing any impact. So, this is a very fundamental crisis. There is the argument that it is already a boom or a doom. We are not making any development out of it. It just gives room for stealing or corruption. That is just what it has resulted in. It has not resulted in any meaningful development.