He Forgot The Hands That Held Him — Until He Fell Again

 By Emeka Chiaghanam

The history of Naira (₦) devaluation, which has plunged Nigeria into deep economic challenges, has come a long way since the birth of the currency in 1973 under General Yakubu Gowon’s military regime.

Nigeria, the rising economic powerhouse of Africa, had just emerged from a civil war and was still tied to British pounds and shillings. Gowon’s new economic direction introduced a new currency. The birth of the Naira was more than just paper and ink, it was a symbol of pride, of a rising Nigeria charting its own course.

Whatever the original intent was, over the decades, that symbol has quietly bled value, dragged down by a storm of policies, pressures, and problems we never fully tamed. Below is a detailed history of the Naira’s devaluation:

1. Early Stability (1973–1985) – Fixed Exchange Rate

• After its introduction in 1973, the Naira was stronger than the US dollar due to Nigeria’s booming oil revenues.
• Exchange Rate (1973–1985): $1 = ₦0.55 – ₦0.80 (pegged to the US dollar).
• Nigeria maintained a fixed exchange rate system, supported by high oil earnings.

2. First Major Devaluation (1986) – Structural Adjustment Program (SAP)

• Reason: Falling oil prices in the 1980s led to a foreign exchange crisis.
• Policy Change: The Babangida regime introduced the Structural Adjustment Program (SAP), which included:
• Devaluing the Naira to reflect market realities.
• Introducing the Second-Tier Foreign Exchange Market (SFEM).
• Devaluation Impact:
• 1986: $1 = ₦2.02 (official rate).
• 1987: $1 = ₦4.02.
• 1990: $1 = ₦8.04.

3. Further Devaluations (1990s) – Economic Crisis & Multiple Rates

• 1994: The Abacha government reverted to a fixed exchange rate ($1 = ₦22) and banned forex trading to stabilize the Naira.
• 1995: The Naira was devalued again to $1 = ₦84 due to economic pressures.
• 1999: Nigeria returned to a managed float system under President Obasanjo.

4. 2000s – Relative Stability & Oil Boom

• 2005: The Naira was revalued (₦128 → ₦132 per $1) but later weakened.
• 2008–2014: High oil prices kept the Naira stable at ₦150–₦170 per dollar under a pegged system.

5. 2015–2016 – Oil Crash & Major Devaluation

• Reason: Global oil prices crashed, reducing Nigeria’s forex reserves.
• Policy Change: The CBN under Godwin Emefiele introduced forex restrictions and multiple exchange rates.
• Devaluation Impact:
• 2015: $1 = ₦197 (official) → ₦300 (black market).
• 2016: CBN officially devalued the Naira to $1 = ₦305 (official rate).

6. 2020–2024 – Floating the Naira & Record Lows

• 2020: COVID-19 and low oil demand weakened the Naira further.
• 2023: President Bola Tinubu’s reforms led to:
• Unification of exchange rates (ending multiple rates).
• Free float of the Naira (market-driven rate).
• Result:
• June 2023: $1 = ₦770 (official).
• 2024: Naira fell to $1 = ₦1,500+ (all-time low).

Key Reasons for Naira Devaluation

At the heart of the Naira’s slow unraveling is the country’s overdependence on crude oil, worsened by bad governance and corruption. When oil booms, the country dances. When it crashes, the people crash harder into poverty. Nigeria’s economy, and her currency, rise and fall with every vibration in the global oil market.

And then comes the hunger for dollars. From importers to students abroad scrambling for the dollars, everyone wants greenbacks. But the supply always papers very thin and scarce. That imbalance alone twists the naira’s arm behind its back.

Inflation hasn’t helped either. The rising prices of goods and services eat away at the naira like rust on old iron. Add to that frequent policy shifts, one day fixed exchange rates, the next a "managed float", and the markets barely know what rules they’re playing by.

Let’s not forget the black market. The black market is so huge that shadow economy doesn’t just whisper rates, it shouts them and people listen. It distorts reality and drags official rates along for the ride.

By the 1980s, the decline became clear. Today, even with efforts to let the naira "float," the waters are rough the economic tides rising. Dollar scarcity persists. Inflation bites deeper, telling unimaginable tales of the masses suffering.

The naira’s story isn’t just economic; it’s emotional. It’s the sigh of a market woman, the worry in a father’s eyes sending his child abroad. The pain of the masses. The frustration of a nation still searching for stable ground beneath its feet.

And somehow, through it all, we still hope it rises again.