Since President Bola Ahmed Tinubu ascended to power, Nigeria’s economy has experienced changes in policies. The most significant of them all was the floating of naira.
Recall that in June 2023, the Central Bank of Nigeria (CBN) floated the naira, which had a significant impact on the country’s economy and its citizens.
AfroWorldNews understands that one of the outcomes of the currency floating is the increase in the “japa budget” for many Nigerians.
For those unfamiliar with the term, “japa” -it means “to run away” in Nigerian slang. It refers to the trend of Nigerians leaving the country in search of better economic opportunities elsewhere.
It is common knowledge that many Nigerians, especially the youth, actively seek to immigrate to other countries due to the challenging economic conditions and limited opportunities in their home country. This trend has become increasingly popular in recent years, with many referring to it as the “brain drain” of Nigeria.
However, with the floating of the naira in June, the japa budget for many Nigerians has seen a significant increase. This phenomenon has caught the attention of both travel agents, and the general public, with many questioning the factors behind this sudden surge.
Understanding naira floating
The floating of the naira is a policy shift from the previous fixed exchange rate system, where the CBN pegged the naira to the US dollar. This system had been in place for several years, but the CBN deemed it necessary to adopt a flexible exchange rate to stabilize the economy and attract much-needed foreign investments. The CBN leadership stated that this decision was necessary to address the increasing demand for foreign currency, dwindling foreign reserves, and the need to align with global market trends.
However, this policy decision has led to an increase in the exchange rate of the naira to the US dollar, with the naira now trading at around N1,100 to a dollar. This increase in the exchange rate has resulted in a significant increase in the price of goods and services, particularly imported ones, as most of these goods are priced in US dollars.
As a result, the Japa budget for many Nigerians has increased. This increase has made it more challenging for Nigerians to save money, let alone afford the cost of immigrating to other countries.
Many Nigerians aspire to study abroad due to the limited opportunities and quality of education in the country. However, the increase in the cost of education in foreign countries, coupled with the devalued naira, has made it unaffordable for many Nigerians to pursue this dream.
In conclusion, the floating of the naira in June has had various effects on the Nigerian economy and its citizens. While it may have provided some benefits, such as attracting foreign investments, it has also made the cost of living and japa budget unaffordable for many Nigerians.
Afro World News