Would you say that the silent prayers of Nigerians are getting answered with the dollar-to-naira exchange rate crash?
But are we really making progress and improving the lot of our economy?
Is this that period when we prepare to start drumming and dancing in anticipation that the hardship faced in the last few months is gradually becoming history?
These are few of the questions Nigerians are hoping to get answers to soon.
You see, it is no longer news that the exchange rate of the dollar to the naira is crashing across all platforms.
As of April 17, 2024, the dollar in the parallel market also known as the black market, is exchanging at ₦970/$1.
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This is according to a Bureau de Change operator in Ajao estate, Lagos State.
While on the official market, the exchange rate is ₦1,156/$1.
Yet, the biggest worry of most Nigerians is why the prices of foodstuff, electronics, transportation and others are not going down.
You see, you cannot blame the people because when the price of the dollar was soaring, the prices of these things were also skyrocketing.
Now, that the exchange rate of the dollar is crashing, the prices of these items aren’t conforming or changing.
Custom Duty
It is very important to note here that the customs duty importers pay over imported goods isn’t reducing.
Just within this year alone, the customs duty has been adjusted upward more than 4 times.
The high Customs Duty Rate is affecting what importers can import.
Meanwhile, this is to discourage the importation of goods and promote patronage of made-in-Nigeria goods. This is the Buy Naija idea.
Bad Road Network
The challenge of bad roads is taking a toll both on farmers and traders. This is because it takes very long for goods to arrive at the desired destination due to bad roads.
Often, perishable goods like pepper, tomatoes, watermelon, oranges and so many others arrive spoilt and rotten.
A journey that should naturally last hours ends up taking days. This consumes more petrol. The farmer wouldn’t want to be on the losing end and neither will the trader.
In the long run, someone has to bear the loss. When the farmers have to bear the loss, they hike the price of the goods next time.
But where the traders have to bear the loss they inflict the pain on the consumers.
The Profit Margin
Again, in business profit is often set based on the cost of purchase, other logistics and unforeseen costs.
As a result, an importer who bought goods at an exchange rate higher than what it is currently will set at a profit margin based on the importation cost.
The importer often imports goods in large numbers and until those are sold or a competitor gets in fresh items at a lower rate and adjusts prices downwards, the price will stay high.
Getting in fresh items at the current exchange rate will force prices down when the profit margin is set.
No one goes into a business to lose money.
However, at that time, the standard organisation has to monitor importers, checking their books to enforce the profit margin each time.
Insecurity
This is a factor that has affected production. The farmers can’t go to their farms any longer because it is not safe. They avoid going further into the forest to farm.
But they must survive, so the price of the produce they have at hand and get from the land around their abode is hiked.
The same can be said of electronics importers who must make a profit on already imported goods before reducing the price of their goods because of the dollar crash.
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If there were no cases of insecurity, bad roads, and high Customs Duty things would have normalised a bit by now.
However, prices are still going up because the regulatory agencies may not be doing enough to monitor profit margins.
As the naira gradually gains value, the government has frowned at those mutilating and violating.
Bobrisky is already cooling down in prison and the Cubana Chief priest may soon follow
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