Dollar Is Now N615

Image: Paradise News

There seems not to be anyone stopping the rise in the dollar's exchange rate. It has continued in its upward journey, and as of Tuesday, the exchange rate stood at N615 at the parallel market in Lagos and Abuja.

However, the decline in the percentage of local raw materials sourced by manufacturers in the country contributes to this rise. This means that many of them run after imported raw materials, and you would require dollars to acquire those. According to information from the Manufacturers Association of Nigeria, the percentage of local raw materials sourced declined to 52.4 percent from 57.5 percent.

According to the information from our source, the dollar sold for N613 and N614 at Zone 4 in Abuja, but in Lagos, it stood at N615 on Tuesday. At Abuja airports, the exchange rate was N615. However, at the Importers and Exporters window, the rate was N415.64 which puts the margin between the official and the parallel markets at N199.36.

Due to the upward surge in the exchange rate, Bureau de Change operators are reducing, and at this pace, the rate might rise to N700 before the end of the year. Our source spoke to some Bureau de Change operators, and many of them lament the continued rise in price. They complained that the scarcity of dollars was having a strong effect on their business and the economy at large. Many of them are holding their dollar due to the rise.

Nigeria today is badly hit by dollar crunch in addition to declining government revenue and oil production. The FG revenue dropped from N970.57 billion in July 2021 to N680.783 billion in May 2022.

In 2021, the nation amassed about $10 billion in non-oil exports, about 30 percent of Bangladesh's revenue from textile exports in 2021. Based on OPEC Monthly Oil Market Report, Nigeria's oil production fell to 1.2 million barrels per day in April 2022 from 1.238 million barrels in March 2022, which is below the oil benchmark of 1.88 million barrels per day proposed in the 2022 budget.

The decline of local input sourcing of raw materials, according to the Manufacturers Association of Nigeria, was caused by the scarcity of raw materials. The percentage dropped from 57.5 percent to 52.4 percent.

MAN further said,

Since the full opening of the economy following the lockdown associated with COVID-19 pandemic, local raw materials and other manufacturing inputs have been relatively scarce and costly. This has also affected the output of the sector negatively.

Our source interviewed different manufacturers, and all of them decried the rise and advised the country to develop a good policy that would proffer a lasting solution to the present condition. They urged the FG to put a lid on things in the industries before the mouth industrialization of any kind.

Source

#Forex

#Dollar

#Naira