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Naira crashes further as aspirants mop up dollars ahead of APC, PDP primaries

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Naira crashes further as aspirants mop up dollars ahead of APC, PDP primaries

Ahead of the primaries of the two leading political parties, the All Progressives Congress (APC) and Peoples Democratic Party (PDP), aspirants are mopping up dollars across the country, leading to the further depreciation of the naira.

According to Daily Trust, the dollar has hovered between N550 to N570 in the last two months before it jumped to an all-time high of N595 at the black market on Thursday.

The Central Bank of Nigeria (CBN) does not however recognise the black market rate, which is far above the N415/$ official rate.

Findings by this newspaper showed that the naira has continued to depreciate at the parallel market against the dollar as many people scoop the scarce foreign currency.

It was gathered that many commercial banks are running out of dollars as they are unable to meet many requests from customers. There are fears in some quarters that the exchange rate might climb to N600/$ as the scarcity persists.

The rush by the aspirants to buy the foreign currency has added pressure on the naira, which has been on the slide for long.

Through their agents, the BDC operators said politicians seeking elective offices have been moving around the country to buy the foreign currency, which sources said is much easier to use “to reach out to delegates” and other critical stakeholders instead of carrying big bags.

The PDP has fixed its presidential primary for May 28-29, while that of the ruling APC would hold between May 30 and June 1.

No fewer than 15 aspirants have been cleared to participate in the primary of the PDP while about 30 contenders have picked the forms for the presidential ticket of the APC.

In the last four weeks, aspirants in both the APC and PDP have been moving across the country to woo delegates and meet critical stakeholders of their parties.

A total of 7,800 delegates will participate in the primary of the APC and 3,700 will determine the flag bearer of the PDP.

One of the leading aspirants in the APC was said to have shared between $300 to $400 (N178,500 and N238,000) to delegates in two states in the North East geopolitical zone.

A former governor told one of our reporters that a female head of a federal agency, who is at the forefront of promoting the governorship ambition of someone, has also been stockpiling the foreign currency.

He said, “She is one of the major contributors to the scarcity of the USD. Whenever she orders for the currency, there would be an increase in the rate of the dollar because she buys in millions.”

Our correspondents report that the trend was not limited to presidential aspirants, as people vying for the governorship, senatorial, House of Representatives and state house of assembly are doing the same.

Aside from delegates, the aspirants have been reaching out to other stakeholders in the political terrain including traditional rulers, religious leaders, CSOs and security operatives, among others.

On Thursday, one dollar was exchanged for N595 at the Murtala Muhammed International Airport (MMIA) in Lagos and other parallel markets in the metropolis, especially Ikeja.

Most bureau de change (BDC) operators say they buy the dollar at N585 and N590 and sell around N595.

“When you go to any bank today, the highest you can probably get is $2000,” says a BDC operator, Nasiru, at Allen Avenue in Lagos.

He said the apex bank is only making the dollars available to their “political allies.”

In Abuja, the naira was exchanged for between N591 to N592/$1. Some of the BDC operators who spoke to our correspondent said the demand has spiked from April but got worse this month.

When Daily Trust visited the popular Wapa BDC market in Kano, it was busy with people going about their normal businesses, but with no element of USD circulating among people.

Speaking to our report, a BDC operator, who asked not to be named, said the dollar price has been rising in the past few days.

“In the last one to two weeks, we sell the dollar at N585 to N587. But suddenly this week it rose to N591, so you can see the changes,” he said.

Speaking on the issue, the President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji (Dr) Aminu Gwadabe, attributed the shading of naira value in the street market to increased political demand, especially with the huge competition for the presidency and other positions.

“As of yesterday, it closed at N592/$1,” he said.

“The naira has been depreciating since April. Of course, during political season, there is usually huge pressure on the naira because politicians share dollars, especially to delegates, key politicians and people of influence,” he said.

Experts predict dark days

An economist at the Lagos Business School (LBS), Dr Bongo Adi told our correspondent that the situation also happened in 2019 as politicians piled up dollars to pay delegates who mostly demand foreign currencies.

“The delegates see that role as an opportunity to feather their nest,” he said.

However, commenting on the issues, a political analyst, Dr Saidu Ahmad Dukawa of Bayero University, Kano (BUK), said the mop-up, if true, will go a long way in promoting money politics in the country and crippling the value of the naira, which will not produce good leadership in future.

Also commenting, Professor Kamilu Sani Fage, a renowned political scientist, opined that if it was established to be true that politicians are the ones mopping up dollars from the forex market, it would portend a lot of problems for the political system.

He said the outcome of such development would not augur well for not just the political system but the entire Nigerian system because, after the monetisation of the political system, Nigerians will not be able to get the right dividends of democracy in the governance period that follows.

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