The Nigerian Naira is under significant pressure at the moment as the government remains clueless in the face of this onslaught on the local fiat currency. The oil-rich West African economy is under pressure as recent economic liberalization plans have somewhat backfired and helped create a major cost of living crisis for its 240 million populace including higher transportation costs, utilities, certain food items, and crucial imported raw materials like palm oil.
Previously, the government had tried hard to brand a scapegoat for this economic crunch by targeting the crypto sector. Binance was banned earlier this year and a few of its senior executives in the country were arrested and indicted under various securities laws. However, the move hasn’t convinced a lot of people and the regulatory authorities have started showing leniency towards digital currencies and even started handing out crypto exchange licenses, albeit to indigenous platforms only. Jailed executives are also being released as the country works to focus on positive crypto regulation rather than enforcing an outright ban.
Despite the current hyperinflation rate of around 28.4%, there is still hope for Nigerians in the long term. This is a bold statement to make as it appears to be all gloomy on the economic front.
Can Nigeria Recover from this Economic Disaster?
For decades, the Nigerian authorities have kept its economy closed, relying on its major oil reserves for foreign exchange. The country is the largest oil producer in the entire African continent and profits are still on the higher side. However, the current administration decided to make a bold move and removed fiscal constraints from the market to allow for an open market model.
This would allow the country to reduce its dependency on oil exports and focus instead on innovative sectors like IT and manufacturing. It could have done a better job at removing these obstacles but now they are history and it is time for the right approach to see it through.
This is the graph of the Naira for the last year:
Image Source: TradingView
The currency is losing value quickly against both the greenback and in the bitcoin to naira exchange rate. Nigeria needs to straighten its act on that front to safely exit the hyperinflation danger zone.
What Needs to be Done?
Years of mismanagement and irresponsible government spending need to be fixed at an urgent pace to stand a chance so there are going to be major cutbacks involved. The positive aspect of this situation is that the country’s massive oil wealth is still intact and if harnessed quickly, it can improve the situation on its own. The financial regulators can also look to improve crypto regulation in the country to bring clarity to millions of crypto users. This will result in a sudden Foreign Direct Investment (FDI) in the country as the digital asset market can command massive short-term influxes on its own as well.
Remitano’s Contribution to Nigeria’s Economic Landscape
In this context, platforms like Remitano enable users to buy and sell Bitcoin conveniently. By facilitating peer-to-peer cryptocurrency trading, Remitano offers Nigerians an alternative to the struggling Naira, allowing them to hedge against inflation and economic instability. As the government shifts towards a more favorable stance on crypto regulation, platforms like Remitano could play a crucial role in fostering financial inclusion and attracting investment. This could help stabilize the economy and provide a much-needed lifeline for many Nigerians navigating these turbulent times.
Remitano exchange platform
