When the naira was hitting record-level lows against the dollar earlier this year, the Nigerian government was quick to pin the blame on speculators. The major scapegoat was Binance, and the government was quick to arrest executives of the cryptocurrency exchange platform sent to discuss the accusations. Currently, Tigran Gambaryan, one of those arrested, is facing charges of money laundering on behalf of Binance, while his health deteriorates in custody.
It’s not a new mode of operation for Nigerian authorities, to look for scapegoats to persecute for the naira’s loss of value on the unofficial currency exchange market in the country. On several occasions, dating back to the tenure of Godwin Emefiele as the governor of the Central Bank of Nigeria (CBN), unofficial currency exchange traders have been targeted, many of them arrested and harassed by state security every time the naira is in a free fall.
Usman Balarabe, a currency exchange trader who carries out his business at Sabo market in Yaba, in the mainland area of Lagos, says the government comes after him and his colleagues even though it’s clear they’re not the reason the naira has continued to lose its value over the last four decades.
“[The government] said we are the ones that made foodstuff and prices of all these other items go up,” Balarabe tells OkayAfrica, recounting the events of last December, when many of his colleagues were arrested. After his inauguration, one of PresidentBola Tinubu’s economic policies was to remove the peg on the official naira-dollar exchange rate and allow for a float determined by market forces. That move played a huge role in the free fall of the naira, but it was only a reflection of Nigeria’s economic situation. The float was part of what affected a huge increase in the cost of living.
While the naira-dollar rate was pegged under the previous administration, there were serious limitations to those who could access the dollar at the official rate. That meant the majority of individuals and businesses had to turn to the parallel market, which reflected the true value of the naira – hovering between ₦200 and ₦300 (around $0.50 to $0.70 at the time) more than the official rate. Even now that the policy has been changed, access to foreign currency through official channels is still heavily controlled by CBN red tape.
Balarabe and his colleagues are providing an essential service, facilitating the flow of foreign currency in a country largely dependent on imports. Most — if not all — of these traders are from the northern region of Nigeria, scattered across all the states in the country. They often operate in clusters along roadsides; in Lagos, they have spots in Lagos Island, the banking area in Gbagada, Allen Avenue in the state’s capital Ikeja, Baruwa junction in Ipaja, and many more.
In parts edited for length and clarity, Balarabe takes OkayAfrica through how he goes about his business.
Photo by Dennis Ade Peter.
Currency exchange traders often operate in clusters, standing or sitting on roadsides in select locations while seeking clients.
Usman Balarabe: I started this work in 2022. It’s one of my brothers that talked about the business. Before, I used to work as a gateman, but he called me and told me to stop because [he felt] I was wasting my time and [was getting old]. The gateman job is a dangerous [and challenging] job, so [my brother] introduced me to this business. He was the one who gave me the money to start. Even now, our money is mixed together. He’s the one who showed me how to go outside [and solicit customers]. Anyone that’s passing, I’ll tell them, ‘I sell dollars, pounds, euros and CFA.’ That’s how I started.
The thing is hard, at times you can get only two customers in a whole week. You can [go a whole day without getting] any customer. That’s the business. The reason I didn’t give up was because I saw many people I knew didn’t have anything on them before now [having] houses [and] cars. That’s the reason I decided to just try my best.
The rates we use to change is from our people outside [the market]. There are people in Abuja, some in Kano, and there are people here in Lagos – that’s Eko market and the airport. So we call them for the rates regularly. I understand the exchange rate [a bit], but now the value of the naira has nothing, you can’t compare it with the dollar. Now, we’re [buying] dollars [from customers] at $1 to ₦1,600, but if someone wants to buy from us, we’ll sell at ₦1,620 or a little higher. That small difference is our own profit.
Sometimes, when the dollar goes down, there’s loss. We have to keep buying dollars with our naira, and sometimes we won’t know on time that the rate is dropping, so we can lose millions of naira. There are many times that we buy dollars and still sell it on that same day. I don’t have dollars on me at the moment but someone can come around looking for some and I’ll recommend some of my brothers. The reason dollars don’t stay with us for long at times is that companies buy from us. They might want to buy millions of dollars and they will just buy from the whole market.
We knew the dollar would go up [at the beginning of the year], but we are even hoping that the rate comes down, because everything went up as the dollar went up [to about ₦1,850]. Even getting food is hard for many of us. You have to close your eyes to buy things. Something that was ₦50 ($0.03) before is now almost ₦300 ($0.18), and the dollar rate has come down since then.
Last December, we entered some hardship, because that’s the time the government sent state security (SSS) people to arrest us. They arrested many of us and the market was really dry at that time. Since then, there have been no arrests here but our brothers usually call us to be at alert when something is happening on their own side. That time, the government said we [caused the increase in prices of] foodstuffs and other items. The dollar was going down at that time but the price of all these things was not going down. That means we’re not the problem. They were just looking for who to blame.
When they arrested some of us, they saw that the price wasn’t going down, so we don’t know how they will solve that problem. Those who were arrested were with SSS for like a week. It was the rest of us here that were arranging food for them. Now we keep ourselves vigilant, like if we see someone that we don’t understand, even if [they come] to ask us about dollars, we won’t answer him. Also, if we see they are in a group, we will move from our usual spots and be prepared to run if anything happens.