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Saturday, April 13, 2024

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    Nigeria crazy dollar inflation rate

    So a couple of friends and I sat down last night to talk about how fúcked Nigeria is right now. So we went ahead to review certain senerios….since we are largely an import based nation, I will try to share some points we raised and play around with.

    All scenarios are the result of thinking and they are not real (really?)

    • Plot 1. Sunday buys electronics from China and sells in the markets here. He does not have enough money to pay for every good and service yet but due to his resourcefulness, he was able to convince a cousin of his to talk to the company and shipping company to ship the goods in and he will pay then when he sells them off, he also had this deal with the shipping company.

    So the shipping company charged him $50,000 in November ending last year to transport his container full of goods and he is to pay off when he sells the goods but in November, the Naira-Dollar exchange rate was 156 or lets put it at 160 which would have been 8 million Naira tops. The goods got to the port last week for Sunday to realize that the Naira Dollar exchange rate is effed up as it has gone to N220 to $1. 

    Now Sunday has to pay N11 million to the shipping company instead of 8. The company on the other hand is not comfortable with business as usual as the economic outlooks for Nigeria does not sound good so they want to get their money before he can take delivery of those goods at the port.

    •Plot 2. The total purchasing cost of the goods is $200,000. Which will have been meant Sunday owed the manufacturing company N32 million Naira. But with the exchange rate messed up, Sunday discovered that he owes the Company N42Million instead which is a N10 million naira increase. Now that is scary.

    Practical Example of these two plots. I got a power bank in November in the middle of a job because I could not afford to have my mobile device not work and electricity is nothing to write home about . I got the power bank for N3,500. It got spoilt, I got another one, for the same price.

    A friend of mine got that same power bank in the first week of January for N4,000 because of the exchange rate and he was angry….In the middle of February, I asked the person who sells it how much the power bank is in the latter part of February and she told me they are sold for N5,000 naira now. Okay….Inflation…real time inflation.

    At least some good can come from this. Nigerians will not send their kids outside the country to get educated because the price is crazy and these countries want their cash in Dollars.

    A patient who needs some medical procedure done in indian was giving a quote of $70,000 in september and he sold off his properties amd begged people to help him. As at then all he needed was about N10.9million right….people have been contributing but right now there is a problem. He needs more money because he needs to raise N15.4 million now because of the currency differential. Now another Inflation reality.

    We still import fuel, food, machinery,trained hands and almost everything else in this country. Brace up for the inflation folks. It comes

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