What is devaluation? Devaluation is diminishing the value of a country’s currency within a foreign exchange rate system.
Naira devalued on the parallel market from #360/$ - #400 - #450- #461 in just four months.
In other words, if you could import a wristwatch for $100 at 360 naira/$1($100 * #360 = #36,000), That same wrist watch would be imported for #46,100 ($100 * #461 = #46,100).
For those that earn in foreign currency I.e $, €, £, that’s good news. It means they can pay for more stuff.
For those that earn in Naira, that’s like a thief coming in the night to steal your money and replacing it with toilet paper because now your naira can afford fewer items.
You feel vulnerable now right? How do I protect myself you ask?
Read on my brother/sister.
Here are a few ways you can ensure you have more purchasing power.
1. Find other sources of income.
Additional sources of earnings would ensure you have more naira to your name, hence you can afford to buy more investment.
Notice I said investment and not sneakers. Why? Simple. Buying sneakers is a liability because it devalues over time and doesn’t add more money to your bank account. It’s always advisable to acquire more things that add or give value than purchasing liability that is worthless every day.
2. Buy dollars.
I cannot stress this enough!! Your naira is tied to one commodity. I.e CRUDE OIL. If the price of crude oil plummets, so does your naira. Even if crude oil price jumps back to $120... .ahhh, good old days, your naira is still helpless. Unless we start manufacturing something else and export at scale, your naira is super fucked. Nothing like $1 = #1, it was an idea sold to gullible Nigerians in exchange for cheap votes but I digress.
How do I buy dollars you ask? Well, I’m happy to tell you you don’t have to worry about an aboki selling you fake dollars. There are platforms that help you buy dollars in Nigeria such as these apps:
1. Bamboo
2. Barter app
3. Chaka
4. Trove
5. Piggyvest
They are all trusted apps. You can even set up a dollar card with Barter. Super cool right?
Download the app, transfer naira into it, and convert into Benjamins. Simple as ABC.
3. INVEST INVEST INVEST!!
Bro! What’s the point of having money if you won’t invest? Devaluation is stealing your purchasing power right under your nose and you’re grinning at your account balance? Need I remind you that $10,000 was just 3.6m naira in February 2020 and as of today July 9, 2020, is worth 4,610,000 naira? Pfft.
There are different ways to invest but most people can’t access these investments. However, there are platforms that can help you invest in stocks now.
Download Bamboo app or Chaka or Trove on play store or app store to start investing but before you do, read this investment advice. ONLY INVEST IN SOMETHING YOU UNDERSTAND OR BELIEVE IN!! E.g I bought Tesla shares because I believe electric vehicles are the future of transportation.
ALWAYS DO YOUR RESEARCH BEFORE BUYING A STOCK!!
There are other ways to invest but I’ll discuss that in another write-up.
4. Buy Crypto!
Look, let’s face it. If the Biafran war happened in the era of bitcoin, the Ibo’s wouldn’t have been left penniless when their bank accounts were seized. Many would have converted their money into Bitcoin and just wait until the war ends. Buying Bitcoin means you’re the only one in control of your money and neither inflation nor devaluation can bother you. Unless you lose your private key, you’ll be fine. I used that analogy because something similar is happening today. Many people feel helpless towards devaluation but you can take power into your hands by buying bitcoin.
However, buying cryptocurrency is very risky due to its volatile nature. But hey, if you have an extra couple of bucks, why not try it?
The Naira is not going to get better. It’s going to get worse. I’m not saying this because I’m unpatriotic but who patriotism help? If we’re not producing something and exporting at scale, your naira would continue to get devalued. PERIOD! SIMPLE AS THAT!! Getting financial education has never been more critical.
I’ll communicate how to invest and buy stocks or cryptocurrencies in another article. Thanks for your attention.
