It seems as if the number of dollars being sold daily is growing, so let’s see how much the Dollar to Naira Black Market Exchange Rate is today.
What is Black Market?
The black market is a secret market or series of transactions that are unlawful or marked by non-compliance with an institutional set of norms.
If the rule specifies the set of products and services that are unlawful to produce or distribute, non-compliance with the rule creates a black market transaction since the transaction itself is illegal.
Also check: Euro to Naira Exchange Rate Today (Latest Update)
However, individuals sometimes choose to utilize the black market due to the affordable services they offer. Traders in the black market are always willing to sell at a discount to the regular market price.
Numerous items are offered on the black market. However, our focus here is on currency transactions on the illicit market.
Dollar to Naira Exchange Rate in Black Market
Dollar to Naira exchange rate today in Black Market
Sell $1 = ₦575
Buy $1 = ₦568
Sell price: it’s the price at which the market is selling.
Buy price: it is the price at which the market is buying.
Although these prices are susceptible to unexpected fluctuations due to the currency market’s volatility, they are, to put it mildly, excessively high.
As a consequence of the dollar’s high exchange rate, Nigerians pay a lot to purchase a little, particularly on foreign or imported products. Additionally, consider the plight of Nigerians who must pay for medical and educational expenses in this foreign currency.
Reasons Why the Naira is So Poor against the Dollar
The dollar stands as the standard exchange rate. However, it is worth noting that less than 40 years ago, the naira was valued as much as the dollar. Indeed, between 1970 and 1975, 79kobo was equivalent to one dollar.
Why has the Nigerian naira depreciated so dramatically versus the US dollar? Several of the primary causes are discussed below:
- Devaluation Of The Nigerian Currency
Nigeria became one of the wealthiest nations in the world during the 1970s oil boom. This was when Nigeria’s then-military head of state, General Murtala Mohammed, said that “the country’s issue is not money, but what to do with it.”
Nigeria’s economy was thriving at the time. However, in the early 1980s, the price of oil on the international market plummeted.
As a result, Nigeria found itself in financial difficulties and difficulties due to our reliance on oil income for virtually all of our foreign currency requirements.
Nigerian administrations have attempted to borrow money from the IMF and World Bank at various points to help salvage the situation.
However, borrowing is subject to certain conditions, one of which is the depreciation of a country’s currency. As long as we continue to borrow from the IMF and World Bank, we continue to depreciate the Nigerian Naira.
- Excessive Importation
Nigeria is highly dependent on imported commodities and manufactured goods. Nigerians import items such as rice, plantain, fish, toothpicks, spoons, etc., daily.
A country that imports heavily nearly always has a declining currency. As a consequence of these exorbitant imports, more money leaves Nigeria’s borders than enters.
Thus, as the currencies of the countries that exports all of these goods rise, the currency of Nigeria falls in comparison.
- Poor Investment in Exportation
Nigeria is a wonderful country! You are welcome to take my word for it. The nation is endowed with enormous natural reserves, people resources, and many tourist attractions.
However, the Federal Government has mainly ignored these export opportunities in favor of crude oil, whose value is rapidly decreasing.
Nigeria continues to export crude oil and buy Premium Motor Spirit (petrol), gasoline, kerosene, and other crude oil components that could have been processed domestically.
Guess what? Numerous refineries in our country are barely operational. The naira can only appreciate if the nation invests in exporting completed goods rather than raw materials.
- Dwindling Economy
Regrettably, Nigeria’s economy, which was once the finest in Africa and among the best globally, has been reduced to chaos due to our overreliance on oil.
Nigeria’s GDP still ranks as one of the continent’s largest economies, but our dismal performance overseas, combined with the collapse of oil prices, has left the Nigerian economy in freefall.
A weak economy always results in a weak currency. However, with the recession now officially proclaimed ended, an end may be near.
- The Nigerian Mentality
The prevalent perception of Nigerians about foreign-produced goods is that everything foreign is superior to anything manufactured at home. That is a very dangerous mindset to adopt.
Foreign nationals prefer to purchase locally produced goods to assist their compatriots, such as the Asian Tigers. However, this is not true for Nigerians. Our zeal for all things international has resulted in the dollar gaining significant ground versus the naira.
Moreover, it must be stated here that the Nigerian mentality was not natural. It was brought to us by our colonial rulers, who sought to discourage consumption of all indigenous goods in favor of their imported counterparts. This colonial mentality continues to affect us to this day.
- Excessive Looting
Nigerian politicians are robbing the nation blind. Tell you what, billions of naira have been embezzled from public coffers by politicians charged with the duty of stewarding this money for the country’s development.
This money is often transferred into foreign currencies, particularly dollars, and stored in foreign institutions. This has exacerbated the naira’s depreciation versus the dollar.
Quick Facts to know about the US Dollar
- The dollar symbol ($) was coined from the previously used American currency known as Spanish Peso.
- The United States dollar is not made of paper; it’s made of cotton, silk fibers, and linen blend.
- The $2 bill is barely in circulation. That’s why it’s known as the “Luck dollar.”
- The dollar is the official currency of over 20 countries in the world.
- The US dollar has over 70 recognized nicknames.
- The US dollar was brought into existence by the Coinage act of 1792
- The US dollar is equivalent to 100 cents, usually in coins.
- The first US paper dollar came into existence in 1875
- The largest dollar bill ever printed was the $100,000 bill, although that bill was never in general circulation.
- The arrows in the eagle’s left talon at the back of the $1 bill represent peace.
Dollar(USD) to Naira(₦) History
Through 2013, 2014, and early 2015. The dollar was exchanged for about ₦160. Late 2015 and all through 2016, it traded for ₦200. From 2017 to early 2019; it was ₦365 per dollar. Then from mid-2019 till date; it is ₦400+ per dollar.
Quick info
- Crude oil price (brent crude) is currently at $97.80 per barrel (as at time of writing).
- The inflation rate in Nigeria is at 15.7% (as of February 2022)
- The maximum crude oil production capacity in Nigeria is 2.5 million barrels per day.
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