Nigerians economy is going through deep recession. Since the fall in global crude oil prices from above 100 dollars to below 50 dollars. Pump fuel prices has skyrocketed locally from 97 naira to 145 naira (97naira is the equivalent of 0.31 cent and 147 is 0.47) in the current exchange rate. Someone with the US dollars might think this is cheap.
Truly, it is not, because many people live in absolute poverty and can’t afford food at the WHO target for poverty line. According to the WHO current index for measuring poverty line. It says that people living less than 2 dollars per day falls under absolute poverty instead of relative poverty. In the developing world this is a common issue as many people are poor. Although we are not here to discuss about poverty however it could be said, that there is a positive correlation between exchange rate and poverty .
The devaluation of Nigeria Naira has cost Nigerians a lot. Although the plan was to encourage domestic goods but look at the economy the government are not putting all hands on desk, they are slacking and everything has falling apart.
The exchange rate to the dollars and the high inflation is causing serious headache and stress to the people. Nigerian don’t have control on the dollars .Therefore, the few parasitic rich are the ones benefitting from it.
The reason why a fixed exchange rate will help our problem is because it will help allocate foreign currency and also encourage productivity in the economy and as well bring a positive outcome from how the dollars was previously handled.