1 USD for N500: How to stay safe in 2017

Posted by Felix Okoli on Friday August 26, 2016 at 10:24:48:

I've been telling some people that the Nigerian Naira is still going to keep falling in the future until our government gets it right adn that's why we could see the US dollar rising to N500 by the time 207 rolls in. If it doesn't happen in 2017, it could happen in 2018. It's common sense and all you have to do to confirm this is take a historical look at Nigeria's exchange rate since the 1980s.

Ordinarily, there is nothing wrong with the dollar even selling for N1000 per unit but the big problem is when the exchange rate is not stable over a prolonged period of time. When a nation's exchange rate is not stable, it makes people poorer and this could lead to extreme poverty in the future which could lead to a civil crisis.

In January 2015 when Jonathan was President, one US dollar was about N208 and by 2016 under Buhari, it has gone to N305. Six months later, it has reached N400 at the black market and I'm predicting that by March 2017, it would get close to N500 if the Federal government and CBN do nothing to stop it.

Although the CBN has tried in several ways to regulate the value of our currency, it seems that most of their efforts are not really working as it mostly depends on the forces of demand and supply to which Nigeria's economy is on the losing side because we are an import dependent nation exporting mostly crude oil which we should be refining in the first place. The best thing for a common man to do is save himself and not hope that government policies will save you in the near future. It could take an economic revolution to save Nigeria's inflation prone economy.

As the value of the Naira falls against foreign currencies, things get more expensive and your Naira would only be able to buy fewer things. It's worse if you put your Naira in the bank and hope that bank's saving or fixed deposit rates can save it when it fact it cannot. The inflation rates are much higher than interest rates which banks offer to customers and so it's better you take your money out of the bank and invest it somewhere else.

Things you can do to protect your wealth
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1. Keep only emergency cash at the bank

2. Convert your funds to to foreign currencies and save in a domiciliary account

3. Invest in real estate: You can buy land, build a house, buy building materials and so on else you would spend more Naira for it in the future.

4. Invest in stocks if you are a merchant/seller. Buy goods that can last up to 1 or 2 years.

5. Pay bills in advance: Things like cable tv, electricity bills paid in advance can save you money because their rates could be increased in the future.

6. Have a foreign account: If you can, open an account in a foreign country that has a stable economy.

7. Invest more money in your business: If you have an existing business and you have idle money, invest it into the business by buying things like cars, trucks, computers and other things that are imported.

8. Do shopping in advance: You should buy food items in advance that you can stock up for the long term like rice, beans, yams, tin foods and so on. Their prices will rise in 2017.

It's one thing to make money in Nigeria and another thing to protect the money you've already made. Poverty happens when people are not able to settle their bills because they didn't plan ahead.