Is naira now stronger than the dollar?
See what SSA to gov Obaseki said that has got people talking.
In the parallel market, a dollar is now equivalent to about N500. A lot of Nigerians have been complaining bitterly about the exchange rate of naira to dollar.
The Nigeria government would always tell its citizens to buy made in Nigerian goods in order not to feel the harsh impact of the exchange rate.
However, a school of thought would tell you that, the exchange rate has no much negative impact on the common man that buys made in Nigerian goods. They would tell you that it is people who like foreign goods that are impacted negatively by the exchange rate.
Using the exchange rate of 1dolar to N500 as an illustration, some Nigerians would tell you that with N500 in Nigeria you can eat a very good meal but you cannot do same in America with 1 dollar.
The Senior Special Assistant to Governor of Edo State, Jack Obinyan, appears to belong to the school of thought who believes that, as far as you are patronizing made in Nigerian goods, the exchange rate will not affect you.
Just recently he took to his Twitter handle to explain the strength of naira to that of the dollar, when you spend the naira in Nigeria and dollar in America. He said “A cup of coffee is $1 in America, I will use N500 to make TEN cups of coffee plus ONE as jars, exchange rate my foot!”
He was however, challenged by some of his followers, who did not agree with what he said.
Previously, Jack Obinyan had explained the purchasing power of the naira. He said, “Purchasing Power is what you evaluate and not the Exchange Rate…Be it $1 = N1,000, I will feed myself and my friend in Mama-put, plus free pure water…Oya do it with one dollar in America… Yeye de oooze!”
As strange as his ideas appear to be, there a definitely some valid points in it. What he said, however, caused mixed reactions
one of those who reacted, @docfredi said, “It is quite unfortunate that you don’t see things as they are. Your country is not in local production and all you think of is Food, food, food.
Now by a television worth $200 in US here in Nigeria nao. It is not just about opening mouth waaaaaaaah!
@docfredi was countered by another Twitter user, @Pr0ud_Princess who said, Only if you knew food is more important than TV. How would you know when you live on TV.
Another Twitter user, @pinijason1 express Shock at what Jack said, he said, “I wonder what Jack is trying to prove here. Check the quality of that food in America relative to our own Mama put and see why one dollar can’t buy”
@pinijason1 was also countered by another Twitter user, @peterdgenius1 who said, “I disagree. The Quality of Good is OK compared to developed Nations. Just bcos a good is packaged doesn’t means it’s safe”
The SSA to governor Obaseki has valid argument, but it will be a very difficult task to convince many Nigerians. We would appreciate contributions from people who are grounded in economics to throw more light on this issue