The Aboki black market Dollar to Naira exchange rate today, Friday, November 11 appreciated further to ₦605/$1 buying rate and ₦620/$1 selling rate according to bureau de change operators in Lagos and Abuja. The British Pound traded around N1005/£1 marking a new historic low for the naira. This recent crash is being blamed on CBN’s announcement that the country’s 200, 500 and 1000 naira notes will be redesigned in December with all old notes becoming obsolete by January 31, 2023.
The speculation is that those who have hoarded the naira over the years will now be looking for a way to convert their money to dollars before the deadline day. Such activities are leading to spikes in the black market exchange rates as these hoarders are most likely willing to pay any price for the dollar before the January deadline when all old naira notes will cease to be legal tender in Nigeria.
These exchange rates are highly volatile and speculative. Nairametrics reports that there is a disparity in the black market rates as most traders simply rely on information from their friends without any standard reference point. The report further suggests that exchange rate goes for as high as N890/$1 in some outlets as currency hoarders try desperately to beat the CBN deadline of January 31, 2023 for new currency switch over.
The website, AbokiFX used to be the standard reference point in Nigeria’s FX black market until the CBN accused the site’s owners of manipulating the naira and shut it down. Now, individual merchants simply fix the price on the fly and there is no way to know the true value of the naira against the dollar.
Before then, the CBN also accused bureau de change merchants whom it used to sell FX of speculation and driving up the country’s exchange rate before shutting them out of the official market.
What all this means is that no one controls the black market rates and the exchange rates can be fixed as the merchants see fit. The persistent dollar scarcity in Nigeria means the demand for dollars far outmatches the supply, sending prices almost out of control. Naira has fallen by over N190/$1 year to date from an average of N565/$1 recorded as of 31st December 2021, currently trading as high as N860/$1 and still rising.
Why is dollar scarce in Nigeria?
The short-term answer is the poor decisions made by the CBN in recent years. When the CBN stopped the sale of dollars to bureau de change operators, it created a parallel market where the BDCs will source for their FX and fix the price as they see fit without any government control or regulation. Furthermore, the ban on the AbokiFX website took away a trusted and central source of information, this led to individual merchants fixing prices based on their real-time demands. Ones a BDC merchant sells high, others follow and that becomes the new exchange rate.
The longer-term reason is the fact that Nigeria exports very little to earn dollars and imports almost everything with dollars. Oil accounts for more than 90% of the country’s export, while everything from sports entertainment to washing machines etc is imported into the country. This dynamic creates excess demand for dollars that is driving down the value of the country’s currency.
The only solution to this dollar crisis is for the country to figure out how to earn more dollars by exporting high-value goods at the same time producing most of the things it needs to reduce imports. The government needs to find a way to attract tourists and investors that will bring dollars into the country. It also needs to secure the lives and properties of Nigerians to boost agriculture and food production at the local level among other measures.
Aboki dollar to naira exchange rates
|Aboki BDC black market||Exchange rate|
|Official CBN rates|
|Pounds to naira black market rate|
|Euro to naira black market rate|
These buying and selling rates are just a rough estimate that can vary depending on your bureau de change merchant and your negotiating skills.
At the maximum, you shouldn’t be selling or buying at more than +/- 10 naira from the prices stated above.
What does the official CBN exchange rate mean?
Sometimes last year, the CBN accuses bureau de change operators in the country of artificially devaluing the naira in other to make profits. It subsequently banned their activities and in one episode, declared foreign exchange platform, AbokiFX an enemy of the state.
The CBN then started to publish the “true” value of the naira on its website.
The CBN rate is the rate at which banks sell PTA and BTA to travelers. It is the rate at which importers and exporters officially do business in the country.
The black market on the other hand are operators who exchange currencies for people usually at a much higher rate than the CBN’s. The CBN has long maintained that the black market account for a small portion of the country’s foreign exchange market.
Why do Nigerians buy currency at the black market?
Despite that fact that the CBN has declared the activities of bureau de change operators as illegal, the black market is still a thriving platform.
For starters, the CBN has capped PTA and BTA allowances at $5,000 and $10,000 respectively. travelers who require more have to rely on the black market to fill in the balance.
Both PTA and BTA is only available to Nigerian citizens, foreign expatriates who live in Nigeria have to source their forex from the black market when traveling.
For bloggers, freelancers and other Nigerians who earn in foreign currency, it is much more advantageous for them to exchange their currency on the black market. They get #810/$ at the black market compared to the #443/$ they would get at the official CBN market.
Who is buying dollars in Nigeria on the black market?
Findings from currency traders suggest that people buy FX for different reasons. First, some convert their savings to dollars to hedge against naira inflation and stash. Imagine buying dollars at the beginning of the year when it was trading at around N600/$, now you will be making a profit of over N200/$ by simply doing the arbitrage.
Then there are those leaving the country in search of greener pastures outside. The CBN’s intervention of PTA and BTA is only limited to $4000 and $5000. Those who require more will have to source for it on the black market. The intervention is also poorly implemented and congested that most students schooling abroad, importers, speculators, and companies looking to repatriate forex often end up relying on the black market.
How to find black market bureau de change operators in Nigeria
Like everything that involves financial transactions, one needs to be very careful when dealing especially with Nigerians. Bureau de change operators can be found at the commercial district of every major city in Nigeria. They can also be found at airports and some major hotels in cities. These operators are usually of Hausa ethnicity, hence the name Aboki.
As a safety precaution, make sure to always deal with operators that have a fixed address in a public shop, that way you can always find them in case something goes wrong.
If you are in Ilorin, black market bureau de change operators can be found inside Kwara Hotel complex along Ahmadu Bello Way, just before government house. The operators located there are tested and you can always trust them to give you a fair price.