One of the major things with which any country can monitor it's growth is, continuous checking to know it's current currency value at any given time. This would go further to let the people of that nation know what their currency is worth, looking at it from the domestic or foreign angle. This will make the country able to compare its currency with others, to know the exchange rate and level of that currency in the world market.
Today, some of the reasons why our dear country Nigeria experiences a fall in its currency value level will be made known.
Among other reasons, the four major reasons why the Nigerian Naira has dropped greatly is as follows:
1. Free Fall of Oil Prices: This is the number one reason for Nigeria's current economic problem. As a result of depending on only one major source of income - petroleum (which we always export), our economy suffers negative effects each time there is a drop in oil price in the world market. As our major exportable product, the revenue gotten from exporting petroleum is largely depended on and for this reason, any fall or drop in oil price goes on to affect the country greatly.
2. Percentage of Import and Export: Higher importation and exportation which is the case in Nigeria, has not being doing the country any good. It is why we still remain where we have always been, importing almost all that we use from other countries, improving the demand for other foreign currency and reducing our Naira value. Our country is expected to increase her production so as to be able to export more than before, and reduce the percentage of imports.
3. Political and Economic Issues: Investors from other countries always search for stable and reliable countries with high economic performance, in order to invest their capital. Some factors like political instability, terrorism in some of the Northern part of the country and lack of constant power supply, all drive away investors from coming into our country with huge investment capitals that is capable of moving the country forward.
4. Inflation: This which points out to a continuous rise in prices of goods and services forms another serious reason why there is a drop in our currency value. With the presence of such a situation in the country, the Nigerian currency will be devalued as it cannot afford one the quantity of goods and services that could be gotten before using the same amount.
5. Nigerians Obsession With Foreign Products: The rate at which the foreign products are so desired has caused many to see domestically made products as inferior, and for this reason, will go on patronizing those ones that were imported. An example is the locally made rice that is usually ignored only to go in pursuit of the foreign/imported ones.
The solution for all of this is, if we can diversify and go on to concentrate our attention on other sectors like the agricultural sector, developing of chemical industries, economic and even political sector, there will be reduced inflation, and the dollar naira exchange rate will become a favourable one.
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