Nigerian Economy in Crisis as Speculators Continue to Weaken Local Currency




In recent years, Nigeria has been grappling with a forex crisis that has significantly weakened its currency, the naira. This crisis has been fueled in large part by currency speculators who take advantage of fluctuations in the forex market to make significant profits. In this article, we will explore how these currency speculators are impacting the Nigerian economy and the steps that can be taken to address this issue.

The Role of Currency Speculators

Currency speculators are part of Nigerian economic crises. They  are individuals or organizations that engage in the buying and selling of currencies with the primary aim of making a profit from the fluctuations in exchange rates. While currency speculation is a common practice in the global forex market, the activities of speculators in Nigeria have had a detrimental impact on the economy, particularly on the value of the naira.

Speaking on the unwholesome practices of Nigerian currency speculators, the Special Adviser to the Nigerian President on Economic Matters, Dr. Tope Fasua, disclosed that the speculators hording Nigerian currency would be shocked by the policies the government is coming up with.

According to him, President Bola Tinubu’s government is working tirelessly to come up with viable actions that would strengthen the country’’s currency, the naira.

He acknowledged that a fall in the value of the currency of a country shows a sign of a bad signal, noting that “when you want to destroy a country, destroy its currency first.”

The senior government official noted that those who are praying and wishing that the currency should continue to fall would be disappointed as a result of what the Central Bank of Nigeria and the government are doing.

Also lamenting the active illicit activities of the currency speculators, a financial expert, Lai Omotola, said that these speculators have constituted cabals in the forex market. He lamented that some people have taken currency speculation as business for long, noting that this practice is causing tremendous harm to the economy.

According to him, the cabals have succeeded in creating the black market, where they use it to smooth the operations of currency speculation and other unhealthy practices. He said that the market cabals control the black market because they decide the bulk money that enters the system.

Omotola said: “When the government floated the naira, they were looking at economic theory, where market forces determine the price. The real market forces are when people are engaging in the business of productivity, like bringing in raw materials from foreign countries for manufacturing purposes as well as for medical bills and student fees. These are productive things.

“We now move away from this and begin to speculate on forex, like buying dollars in bulk and keeping them with the expectation that the price will increase. These are what the business speculators are doing in the forex market, and that is not productive.

Weakening the Naira

Nigeria heavily relies on oil exports for its revenue, and as such, the country is vulnerable to fluctuations in global oil prices. 

Currency speculators take advantage of these vulnerabilities by manipulating the forex market to weaken the naira against the dollar and other foreign currencies. Nigerian naira exchange rate today compared with those currencies is high.

The speculators do the manipulation by flooding the market with large quantities of foreign currency, creating an oversupply that drives down the value of the naira. 

The Nigerian Central Bank has been in a constant battle to stabilize the naira and counter the efforts of currency speculators. However, the actions they take, such as imposing capital controls and tightening monetary policy, often have unintended consequences and can negatively impact the economy as a whole.

Impact on the Nigerian Economy

The weakening of the naira due to currency speculation has severe implications for the Nigerian economy. Here are a few key areas that are affected:

1: Inflation:

The devaluation of the naira leads to an increase in import costs, which, in turn, raises the overall cost of goods and services within the country. This leads to higher inflation rates, eroding the purchasing power of individuals and businesses.

According to the National Bureau of Statistics (NBS, the prices of essential goods and services continue to soar. The rate of inflation in Nigeria as of November 2023 was

28.20 percent, one of the highest in the world. It has been predicted by economic experts that the inflation rate may increase to 30.00 percent by the end of January 2024.

2: Foreign Investment:

Currency speculators create an environment of uncertainty and volatility in the forex market, making it less attractive to foreign investors. This lack of investor confidence hinders the inflow of foreign direct investment, which is crucial for economic growth and development.

3: Balance of Trade:

A weakened Naira makes imports more expensive while providing an advantage to Nigerian exporters. However, the negative impact on imports outweighs the benefits to exports, leading to a larger trade deficit and an imbalance in the country’s overall trade.

4: Socio-political Stability:

The economic consequences of a weak currency can have broader socio-political implications. The rising cost of living, high inflation, and reduced foreign investments create an environment of discontent among the population, which can potentially lead to social unrest.

Addressing the issue

To mitigate the impact of currency speculators and address the forex crisis, it is crucial for Nigeria to take targeted measures. Here are some potential solutions:

1: Diversification:

Economic activities in Nigeria are centred on oil .Reducing Nigeria’s reliance on oil exports and diversifying the economy will make it less vulnerable to oil price fluctuations.

Encouraging sectors like agriculture, manufacturing, and services can help stabilize the currency and stimulate economic growth. This will reduce reliance on Nigeria’s oil industry, which is currently overwhelmed.

2: Strengthening the Financial Sector:

Enhancing the regulatory framework and strengthening the oversight of the financial sector can help detect and prevent manipulative activities carried out by currency speculators. This will not only protect the value of the naira but also promote investor confidence.

3: Improving Transparency:

Increasing transparency in the forex market and making critical information easily accessible can help reduce the opportunities for currency speculators to exploit the system. It is essential for the Nigerian authorities to collaborate with other stakeholders, such as banks and financial institutions, to develop robust mechanisms to monitor and regulate the forex market effectively.

4: Enhancing Forex Reserves:

Building and increasing foreign exchange reserves can provide a buffer against speculative attacks on the currency. A healthy reserve can help maintain stability in the forex market and prevent excessive depreciation of the naira.


Looking at Nigeria’s economy as at today, no doubt, currency speculators play a significant role in the country’’s forex crisis, contributing to the weakening of the naira. This, in turn, has adverse effects on the economy, including inflation, reduced foreign investment, and trade imbalances.

Take note of Nigeria’s dependence on crude oil for export.Therefore, to address this issue, the country must prioritize diversification, strengthen the financial sector, improve transparency, and enhance its forex reserves. Only by taking comprehensive measures can Nigeria protect its currency and foster sustainable economic growth.

Author: pqrmedia
I am a professional journalists with years of experience. My aim in life is to educate people through well researched contents

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