Hey Readers, this article is linked to my previous post on Recommendations on how to grow the Naira
I believe in Nigeria and I know you do too. Pray for Nigeria as often as you pray for yourself. With prayer, we can move mountains. We should start praying that the price of crude oil starts rising again. Nigeria is partly in this mess because she did not save sufficient amount of money when the price of crude oil was high.
How? Normally when Nigeria sells crude oil to foreign countries, they pay Nigeria in Dollars, the foreign currency after being converted to Naira is used for the construction of roads, water, electricity and workers get paid from it. But not all of this foreign currency received by Nigeria is converted to Naira, some are kept by the Central bank and are sold to people who might want to use the Naira to buy Dollar. These unconverted foreign currency is kept in the central bank in an account called EXCESS CRUDE ACCOUNT (or simply foreign reserve). This is where the Central bank get the dollar they sell to Banks and Independent marketers of foreign currency. When the price of oil was high at about 140 Naira, Nigeria was able to save up to 60 million dollars in this account. Now that the price of crude oil has fallen to 30 dollars per barrel, we are no longer able to save foreign currency, we now withdraw from the money we saved. As at February this year 2016, the foreign currency in that account stands at less than 20 million dollars. Yes, and that is why the dollar is scarce and the price is high because the government is trying to manage the one left, by rationing. The excess crude account can recover and go rich again once the price of crude oil starts rising. Therefore we have to pray, even more than the people of Nineveh… Air your view in the comment box below.
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