As the 2023 presidential election campaign enters its final two weeks, the naira-dollar exchange rate has reached its lowest point since November 2022.

According to checks by Investors King, the black market rate for the greenback was as high as N755/$1 on February 10th, 2023, while the official I&E Window closed at N461.5/$1, a difference of approximately N293.5.

The scarcity of new naira notes has added to Nigeria’s growing list of economic issues and is posing a new challenge to the country’s economy. This shortage is due to a policy mandating that all Nigerians exchange their old notes for new ones by February 10th, which aimed to tackle corruption and counterfeiting but has had unintended consequences as many Nigerians have been unable to make the exchange.

The President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji (Dr) Aminu Gwadabe, informed Investors King that the currency redesign has not yet positively impacted the demand for currency exchange as the supply remains limited. “Yes, the naira redesign has not positively impacted the value of the local currency against the greenback as there is a lack of liquidity in the market,” he said via text message.

Another operator, who spoke to Investors King on the condition of anonymity, attributed the surge in demand to the impending 2023 elections, as politicians have already acquired a significant amount of forex.

“Most of the forex that would have been available has already been bought by politicians in October ahead of the elections. That is why the exchange rate depreciated massively at the time,” the operator explained.

Another operator stated that despite the recent depreciation, the exchange rate is still fairly stable and is trading within a 2-3% band.

Some BDC operators, who wished to remain anonymous, expressed frustration with the current scarcity of new naira notes and its impact on the economy. “The scarcity of new naira notes has created a lot of problems for the economy,” said one operator.

“Most of our customers already transfer into our accounts but some of us still need cash to pay for daily expenses important for running a business. Some of our staff still rely on public transportation.”

Another operator added, “This situation is unacceptable, and we hope that the latest intervention by the council of state will help to address the issue as soon as possible. While the policy to go cashless is a welcome development, it needs time and careful planning to deliver the rewards. As things stand, time is short and the planning has been short of a disaster.”