Dollar to Naira Black Market Today Friday 23/12/2022 – See the latest and up-to-date dollar to Naira CBN rate as well as dollar to naira bank rate today. Find the Aboki dollar rate in Nigeria today, The official CBN dollar rate, latest dollar to naira news, trends, and updates on this page.
How Much is Dollar to Naira and the official Exchange Rate Today, 23th December 2022?
Please note that the Central Bank of Nigeria (CBN) does not recognize the parallel market (black market), as it has directed individuals who want to engage in Forex to approach their respective banks. The parallel exchange rate (black market rate) always differs from the CBN rate.
The black market rate for dollars is frequently higher than the Central Bank of Nigeria (CBN). The CBN Exchange rate is the rate at which you can purchase or sell dollars for Naira on the CBN dollar-to-naira website, cbn.gov.ng.
The dollar to naira bank rate is the rate you use when you buy something from a foreign website with your Naira MasterCard or Debit card from a Nigerian bank. These rates are almost always cheaper than those available on the black/parallel market.
Many people have been asking both online and offline about the possibility of them buying the United States dollar directly from the Central Bank of Nigeria. If you are one of those people, this article will help you greatly.
Some people have also asked other questions relating to buying dollars in Nigeria and we will do justice to some of these questions.
The Central Bank of Nigeria is the apex bank charged with the responsibility of ensuring monetary and price stability in Nigeria. The bank’s core mandate also includes issuing legal tender currency in the country, maintaining external reserves in order to safeguard the international value of the Nigerian Naira. The CBN is also the official banker to the federal government of Nigeria providing financial and economic advice. In addition to that, the role of the CBN is to also promote a sound financial system and ensure high standard of banking activities and financial stability in Nigeria.
As an individual, it is impossible to just walk into the Central Bank of Nigeria and buy the United States dollars. This is not permitted by the CBN’s present policy, it is only commercial banks and Bureau de Change operators that are allowed to buy dollars and other foreign currencies from the CBN.
So if you were planning to visit any of the CBN branches to buy the U.S. dollars, you will be disappointed because they will not sell it to you.
The CBN being the apex bank only regulate the activities of all Nigerian commercial banks, they do not serve individuals, this means that it is also not possible for an individual to own a bank account with the CBN.
One thing you should note is that the dollar rate at the CBN is entirely different from the parallel market, this means that the CBN foreign exchange rate is the cheapest in Nigeria.
Yes, you can buy the United States dollar from any of the commercial banks or operators of Bureau de Change. Before now, all registered and certified Bureau de Change operator were able to buy dollars directly from the CBN, sadly this has changed.
The CBN recently stopped the sale of forex to Bureau de Change operators. As it stands, you can only buy dollars from commercial banks in Nigeria.
The major reason that the CBN stopped the selling of dollars to the Bureau de Change operators was because of their quests for abnormal profits which made them sell dollars at very high rates at the expense of the stability of the naira.
The Nigerian currency was negatively affected by the greediness of some Bureau de Change operators who sold dollars at high rates just to make profits.
What this insinuates is that only commercial banks are presently able to sell dollars at reasonable rates to individuals and companies. The commercial banks mainly sell dollars to individuals for the following purposes; payment of foreign medical bill, payment of school fees overseas, business travel allowance, and personal travel allowance.
It is always safe and cheaper to buy dollars from commercial banks, this is because their rates may not really be as high as the rate at the parallel market. Many banks may give you lower rates depending on how much dollars you are buying, this method is more suitable for people who wish to buy dollars in large quantity.
Simply walk into any of the commercial banks in Nigeria like Zenith Bank, Guarantee Trust Bank, Access Bank, First Bank, Fidelity Bank, Union Bank, and United Bank of Africa. Go straight to their customer services and request that you want to buy dollars.
Some banks may not have enough dollars if you want to buy in large quantity, you may need to buy little quantities from other banks to add up.
You can not receive dollar in your naira account, the naira bank account is made only for transactions in the naira currency. If you want to receive dollars in Nigeria through your bank account, you have to open a dollar account also known as a domiciliary account. This is the only way you can receive dollars in your bank account in Nigeria.
Opening a dollar domiciliary account is the easiest way to receive US dollar in Nigeria. A US dollar account will enable you to receive bank transfers from abroad and you can withdraw your dollars by simply walking into any branch of your bank.
The requirements to open a dollar domiciliary account in any of the major banks in Nigeria are almost the same, find out your bank’s requirements and present the needed documents to enable you open the dollar account.
You can now send your account number, sort code, and bank name to whoever wants to send you the dollars from overseas.
According to the Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele, the only recognised foreign exchange market in Nigeria is the Importers and exporters (I&E) FX window. This means that the dollar to Naira rate is not fixed as before.
How to Own a Dollar account in Nigeria
This article will give you complete information on how you can open a dollar account in Nigeria. After reading this article, you will know about the requirements for opening a dollar account in Nigeria.
We will also try to answer some questions that have been asked by people regarding how to open a dollar account in Nigeria. See the questions below;
- How can I open a USD account in Nigeria?
- Which bank is best for dollar account in Nigeria?
- Can I open a domiciliary account with naira?
- How much does it take to open a domiciliary account?
What is a Dollar Account?
A dollar account is a type of domiciliary account, it is an account that enables you to receive and send money in dollars overseas. A domiciliary account is a bank account that operates mainly on a particular foreign currency other than the naira.
Who Should Open A Dollar Account in Nigeria
If you are someone that imports goods from other countries, you should open a domiciliary account. The dollar account is also for Nigerians who are planning to study abroad. If you are carrying out an online business like blogging, freelancing, etc., then you must open a dollar account to enable you receive payments or send money in dollars.
The need for Nigerians to own a dollar account is much especially with the continuous increase in the rate of dollar in Nigeria.
Requirements for Opening a Dollar Account
The process of opening a dollar account is almost the same as opening a new naira bank account in Nigeria. However, there are some requirements you need to meet in other to be able to open a dollar account.
- A photocopy of a government-issued identity card. Example; International passport, Driver’s License, Voter’s Card, National I.D. Card, or other legitimate means of identification that are acceptable by the bank.
- A passport photograph
- Two reference forms that must be signed by owners of Current accounts in your bank.
- A utility bill that carries your residential address (not older than 3 months).
How can I open a USD account in Nigeria?
Like we have written above, you need those requirements before you can be able to open a Dollar account in Nigeria. Once you have met the requirements listed above, your domiciliary bank account will be opened.
Which bank is best for dollar account in Nigeria?
Most of the prominent banks in Nigeria today are good options for opening of dollar account. If you are looking for a bank to open a domiciliary account in Nigeria, you should consider any of these 5 banks;
- Zenith Bank – opening and operating a dollar account with them is relatively easy and fast.
- Guarantee Trust Bank – this is the bank with one of the best online banking system and services.
- Fidelity Bank – their monetary requirement for opening a dormicilary account is not much as compared to others.
- First Bank – this is undoubtedly the biggest bank in Nigeria and their services have improved tremendously over the years.
- United Bank of Africa – they have operating as one of the biggest banks in Africa for a while and they are dependable.
Simply go with your documents to any of the banks listed above or any other Nigerian bank that opens domiciliary account and request for account opening form. Fill in the form properly and remember to tick ‘Domiciliary’ in the account type and also choose ‘Dollars’ in account currency.
Submit your documents and passport, make a deposit if it is one of the requirements from the bank. You will have to link your BVN to the account, once you have done al these, your dollar account will be opened for you.
Can I open a domiciliary account with naira?
The answer to this question depends on the bank you are opening the dollar account with and also your account officer. You are ordinarily not supposed to open a dollar account with Naira. You are supposed to buy dollar maybe from the bank or black market to use and open a domiciliary account.
However, your bank may decide to make use of the funds in your savings or current account with them to buy dollars and open your dollar account without you having to source for the dollars yourself.
Even if your bank are not doing this, your account officer may request that you come with the Naira equivalent of the required amount of dollars, he or she will buy dollars through his or her connection for you.
How much does it take to open a domiciliary account?
Several banks do not require any amount of money to open a dollar account for you, they do this completely free. However, there are other banks that will require a minimum deposit between $50 – $200.
Ensure to find out how much your chosen bank are demanding as minimum balance for dormicilary accounts.
Can I save money in my domiciliary account?
Saving money in your domiciliary account is a very good idea especially with the continuous rise of dollar rates in Nigeria. Imagine if you had $1,000 in your domiciliary account when dollars was N290 each, that would have been a total of N290,000 as at then, but now it would have increased to over N450,000 depending on how you are selling it (official or black market).
Parents can also use their domiciliary account to save money especially for their children’s education overseas.
How dollar price increase in Nigeria over the years
In this section, we are going to discuss the consistent increase in the price of the United States dollar in Nigeria. We will also talk about the factors that are influencing this rise.
The United States dollar has continued to rise at an alarming rate in Nigeria over the past years. This is as the Nigerian Naira has continued to depreciate in its value.
The rate at which the U.S. Dollar has increased in Nigeria over the years is shocking and there is no sign that the increase will stop anytime soon.
Why is naira falling against dollar?
There are many obvious factors that are responsible for the continues depreciation of the Naira against dollar.
One of the major reasons is that Nigeria spends a large chunk of its foreign currencies on importing important items like electronics, refined petrol, wears, and food.
A whopping $47 billion was spend by Nigeria on importation in 2019, $28.7 was spent on invincible things like financial services, medical tourism, professional fees, and business travel.
The continuous demand of the American dollars by Nigerian importers has been the major factor why the Nigerian Naira keeps depreciation while the dollar increases.
Nigerian importers constantly need the dollars to enable them to import goods and pay for services abroad, this has continued to have a negative effect on the Naira.
The fact that Nigeria does not produce much locally makes the country to depend on imports for its survival.
Between 1999 to 2021, the United States dollar worth has increased in Nigeria by over 500%, this rise is detrimental to the survival of Nigeria’s economy.
However, we should be aware that this did not just happen overnight, there are many factors that contributed to this, this increase in dollar rate may continue as long as these factors are not handled. We are going to explain these factors in this post, please continue reading carefully.
Ways to Convert Dollar to Naira in Nigeria
Several people have been surfing the internet on how they can convert United States dollar to Nigerian naira. If you are among these set of people, we are writing this article for you.
Also, some people have asked questions online regarding the changing of U.S. dollar to Naira in Nigeria. We will provide answers to some of their questions as written below.
Are you a businessman, an investor, or someone that is having transactions in dollars and you are wondering ways you can convert dollar to Naira to probably know the actual sum of the dollars you have in naira? We will provide you with the various ways you can do this in Nigeria. When we say convert dollar to naira, we mean either you are changing the physical dollar you have to Naira, or you are using a currency converting tool to just know the value of a certain amount of dollars in naira.
Why you should know how to convert Dollar to Naira
For people who want to just know the worth of a particular amount of dollars in Naira, knowing how to convert the United States dollar to Naira will save you from being cheated, it will also enable you to know the actual worth of the dollars you probably received.
If you sold goods or services and you are paid in dollars, knowing how to convert the dollar to Naira will help you to know how much you are being paid. Even if you were bidding for a job, contract, or any other business transaction and it is being priced in dollars, once you know how to convert the dollar to naira, you will not be cheated.
Also, anybody in Nigeria that is in possession of the United States dollar must convert it to Naira before being able to use it for general purchase.
Ways to Convert Dollar to Naira in Nigeria
Lets say you have about $2,000 and you are looking for ways you can convert it to naira, you must first of all know the current exchange rate of Nigerian Naira against the United States dollar. Knowing this rate will help you to choose an exchange means that has a better exchange rate for you.
You should also be careful when seeing what looks like a juicy offer with exchange rates better than the latest market exchange rate.
How to convert dollars you have received to naira
1. International Credit Card:
This is one of the best ways to convert dollars to naira. You have to open a U.S. dollar bank account, after which you can apply for an international credit card. This is one of the best ways to convert the U.S. dollar to naira at a good rate, it is stress free and extremely safe.
Once you have received the dollars in your account, you can then proceed to withdraw them in naira. Using international credit card to convert dollar to naira will give you the current market exchange rate, it also has interbank rate benefits as well.
2. Central Bank of Nigeria:
You can easily walk into any branch of the Central Bank of Nigeria and convert your dollars into Naira. You can find the CBN branch in every state of the federation. One huge benefit you will get from converting your dollars to naira at CBN is that you will convert it at the current daily market exchange rate cheaper than other ways.
3. Commercial banks:
Almost all the commercial banks in Nigeria will convert your dollars to naira. However, you may get a slightly higher rate than what you will get at the CBN. Walking into any commercial bank in Nigeria, you will see displayed daily forex exchange rate which will give you a clue on the amount you are going to get after changing your dollars to naira.
4. Bureau de Change operators (No More)
Before now, it was possible to change dollar to naira with Bureau de Change operators, but CBN recently stopped selling dollars to them because of their greed which made them to exchange dollars for people and companies at a very high rate, this was affecting the stability of the naira. This is why none of the Bureau de Change operators are able to change dollars to naira for now.
These are called back market foreign exchange exchangers. They constitute the parallel market in Lagos and in other major cities in Nigeria.
How to know the value of dollar in Naira
If you are bidding for a job and it is priced in the United States dollar, you will need to quickly convert the sum of the job in dollars to naira to be able to know how much exactly you will get in naira. Doing this is easy, you can also visit; Google.com, search for ‘dollar to naira’. Google always display only the official exchange rate and not parallel.
Once you have searched for the words, you will see the official exchange rate displayed. Scroll below the rate to where you have 1 dollar, type in the total amount of dollars you want to convert to naira. As you type in the amount, you will see the Naira value of that dollar amount displayed in the Nigerian Naira row.
Where can I change dollar?
You can change dollar to naira by using international credit card after opening a U.S. dollar bank account, you can also change dollar to naira at the Central Bank of Nigeria. Lastly, you can walk into any commercial bank in Nigeria and change your dollars to naira.
What was dollar to naira in 1999?
As at 1999, $1 was equal to N21.89, you can see that a lot has changed within 18 years. The factors listed below have continued to prevail thereby consistently influencing the escalation of the dollar rate in Nigeria.
What was the rate of dollar to naira in 2006?
Between 1999 and 2006 which marked the beginning of democracy in Nigeria, the Dollar rate had increased by over 100%. In 2006, $1 equaled to N128.28.
However, the dollar has witnessed a significant increase in its value between 2015 to 2021 in Nigeria. As at 2015, $1 was N192, it increased to N304 in 2016, N305 in 2017, N306 in 2018, N307 in 2019, N379 in 2020, and is presently valued at N410.45 official market, while the black market value is way over N575.
With the way things are going, many people have been making predictions that the Dollar may soon reach N1,000. This prediction has made lots of savers and speculators to store up dollars instead of Naira.
How to Calculate dollar to Naira
If you are one of the people that have been searching online for information on how to calculate dollar to Naira in Nigeria, you have come to the right page, this is because we are going to give you a complete details on how you can calculate dollar to Naira.
We will also try to answer a few questions regarding this topic
- How much is $100 US in Nigeria?
- How much is $1 US in Naira?
- How is $50 in Naira?
Why you should calculate dollar to Naira
If you are an international business person, an investors, someone that has just received some dollars, an individual bidding for a job that is valued in dollars, student trying to study abroad, or parent trying to send money to someone abroad, then you need to know how to calculate dollar to naira. In simple terms, we can say that you need to know how to convert dollar to naira.
Have you just received some money in dollars and you are wondering how to convert or calculate it to naira? If your answer is yes, also continue reading this post.
About the United States Dollar
The United States dollar is the official currency or legal tender of the United States of America. It is also known as greenbacks and abbreviated as USD, and US$. The U.S. dollar is the world reserve currency and unarguably the most popular currency in the whole world.
The robust economy of the United States of America has given the dollars a serious push and backing making it remain as the strongest currency in the world.
The role of the United States dollar in the Nigerian economy
The United States dollar plays a very important role in the economy of Nigeria. This is because the Nigerian economy deals more on importation than it exports. All the goods and services that are imported to Nigeria are paid in dollars, this is why the demand for the U.S. dollars is always on the increase in Nigeria. Almost all the electronics and other home appliances are imported, this monopoly has made sure that the United States dollar remains a key player in the Nigerian economy.
How the demand for the U.S. dollar has affected Naira
Unfortunately, the constant demand for the United States dollar has negatively affected the strength of the Nigerian naira in the foreign exchange market.
This is because Nigeria is solely depending on oil for international revenue generation, oil is primarily being valued in the U.S. dollars. The demand for dollars is Nigeria becomes severe when the number of imports increases, this is because importers and businessmen will need to buy dollars to use and pay for their imported goods and services, as well as pay for clearing and shipping.
This tends to create a demand for the United States dollar, it also create scarcity of the dollars which increases its value against the Nigerian naira.
We are taking time to explain this so that you can understand how important the United States dollar is and why you should know how to calculate dollar in Naira.
How to Calculate dollar to Naira
Calculating or converting dollar to Naira is very important to businessmen, importers, individuals who are or will be having dollar-denominated transactions, and students who are planning to study abroad.
This is because the value of the naira keeps fluctuating because of several factors like the increasing rate of inflation, political crisis, insecurity, increase in imports, and fluctuating price of oil.
One of the best ways to calculate dollar to naira is by using the search engine platform known as ‘Google’.
Doing this is easy, simply visit; Google.com, n the search box, type ‘dollar to naira’. Google always display only the official exchange rate and not parallel or black market rate.
Once you have searched for the words, you will see the official exchange rate displayed. Scroll below the rate to where you have 1 dollar, type in the total amount of dollars you want to calculate to naira. As you type in the amount, you will see the Naira value of that dollar amount displayed in the Nigerian Naira row
How to change dollar to Naira
- International Credit Card: If you are expecting payments in dollars, especially if the payment may become recurring, you should consider using an International credit card. This is one of the best ways to convert dollars to naira. You have to open a U.S. dollar bank account, after which you can apply for the international credit card. Using the international credit card to calculate U.S. dollar to naira will give you the benefit of having it at a good rate, it is stress-free and extremely safe.
Once you have received the dollars in your account, you can then proceed to withdraw them in naira. Using an international credit card to convert dollar to naira will give you the current market exchange rate, it also has interbank rate benefits as well.
- Central Bank of Nigeria: You can easily walk into any branch of the Central Bank of Nigeria and convert your dollars into Naira. You can find the CBN branch in every state of the federation. One huge benefit you will get from converting your dollars to naira at CBN is that you will convert it at the current daily market exchange rate cheaper than other ways.
- Commercial banks: Almost all the commercial banks in Nigeria will convert your dollars to naira. However, you may get a slightly higher rate than what you will get at the CBN. Walking into any commercial bank in Nigeria, you will see displayed daily forex exchange rate which will give you a clue on the amount you are going to get after changing your dollars to naira.
Before now, it was possible to change dollar to naira with Bureau de Change operators, but CBN recently stopped selling dollars to them because of their greed which made them to exchange dollars for people and companies at a very high rate, this was affecting the stability of the naira. This is why none of the Bureau de Change operators are able to change dollars to naira for now.
How much is $100 US in Nigeria?
Going by the official rate of the United States dollar today which is N410.77 per U.S. dollar, $100 US will give you N41,077.
How much is $1 US in Naira?
The official rate of the United States dollar in Nigerian naira is N410.00, the parallel rate fluctuates between N560 – N575 for one dollar.
How is $50 in Naira?
Since the official rate of the United States dollar in Nigerian naira is N410.77 per dollar, converting $50 to naira will give you N20,538.50.
How to buy dollar from Nigerian banks, requirements, things you need
We will focus today on how you can buy United States dollar directly from commercial banks in Nigeria. We will also tell you the documents that are required before you can buy dollars directly from banks in Nigeria.
Below are some of the questions that have been asked online and we will be answering them accordingly in this post.
- Do Nigerian banks sell dollars?
- Can I get US dollars from bank?
- How much is dollar to naira in banks?
Due to the recent ban in selling foreign currencies to Bureau de Change operators by the Central Bank of Nigeria, many Nigerians have been left stranded regarding where they can buy the United States dollars in Nigeria.
The CBN recently accused the Bureau de Change operators of masterminding money laundering in the country and also allowing greed to make them sell dollars at very high rates which in turn affected the stability of the Nigerian naira.
This has made many customers to turn their attention to commercial banks as their only safe alternatives following the ban on BDC. This change of operations also come with its demand, commercial banks are regulated and they do not just sell dollars at random, there are requirements that must be met.
Even before the ban on sales of foreign currency to BDC operators, several commercial banks were into buying and selling of foreign currencies and they have now become the only official sellers of foreign currencies. You can withdraw dollars from these commercial banks just the same way you withdraw naira.
The recent CBN policy which banned the sales of foreign currency to BDC operators also mandated licensed commercial banks in Nigeria to make provisions in terms of setting up structures that will accommodate and efficiently serve the myriad customers that will be approaching them to buy dollars and other foreign currencies.
This is why many commercial banks have set up teller points inside their banking halls to serve their customers who want to buy dollars or have other foreign exchange needs. Several commercial banks sent mails to their customers informing them that they now have dollars to sell at a cheap exchange rate.
How do banks sell dollars?
Selling of dollars by the commercial banks in Nigeria is regulated, you can not just walk into any bank and buy dollars in huge sum, that is officially impossible. Commercial banks sell dollars in in three categories, see them below;
- As Personal Travel Allowance
- Business Travel Allowance.
- Foreign School Fees Payment
The highest dispensation for personal travel allowance is $4000, while the highest dispense amount for business travel allowance is $5000.
Can I buy dollar from Nigeria bank?
You can buy dollars from any of the licensed commercial banks in Nigeria. Dollars can be sold to you through three ways which are; personal travel allowance, business travel allowance, or foreign school fees payment.
Requirements to buy dollars from banks in Nigeria
If you are making plans to visit any commercial bank in Nigeria to buy United States dollars, you must go along with the required documents else you will not be able to buy the dollars.
Below are the requirements to buy dollars from Nigerian banks
- If you are applying for PTA/BTA payment, you must provide a dully filled Form A, your valid Nigerian Passport, your valid visa. You will also provide an international return ticket (travel date must not be more than 14 days from the date of dollar purchase).
- All BTA applicants must present document of Registration/Incorporation.
- BTA applicants must also present letter of invitation from their business partner overseas.
- People applying for foreign school fees payment should either be parent/guardian of the student, or the student.
- Foreign school fees payment applicants must present a valid BVN.
- Foreign school fees payment applicants are required to present Applicant’s valid ID card, admission letter, duly completed Form A, and payment invoice.
Please note that minimum of 5 hours journey of flight time which will originate from Nigeria is required for PTA/BTA application.
Do Nigerian banks sell dollars?
Yes, Nigerian licensed commercial banks are currently selling dollars to customers through these three ways; personal travel allowance, business travel allowance, or foreign school fees payment. Simply work into any of the commercial banks in Nigeria with documents as stated above.
Can I get US dollars from bank?
You can get US dollars from any of the banks in Nigeria just the same way you can get other foreign currencies. However, this is subject to availability of the United States dollar in the bank. In the event that the bank do not have any or enough dollars to sell to you, they can direct you to another branch if it becomes necessary.
How much is dollar to naira in banks?
One good aspect of buying US dollars from deposit money banks also known as commercial banks in Nigeria is that you get to buy it at almost the same rate as the official rate which is cheaper than the parallel rate also known as black market.
Walking into any bank, you will see a notice board displaying how much the bank is buying each foreign currency and how much they are selling it.
Having said this, we can use the current dollar to naira exchange rate to answer this question. In most of the banks, you are going to get something almost the same as this; $1 = N410.77.
What is the reason for increase in dollar rate?
The COVID-19 pandemic has also played a role in the alarming increase in dollar rate. This is because many investors are rushing to have it and use for transactions. The United States dollars are dominating more than 60% of foreign bank reserves.
The Nigerian economy majorly depends on oil to survive and this is why the economic situation in the country gets crippled each time the price of oil drops.
Another reason why the dollar has continued to increase in Nigeria is the rate at which the dollar is being used by Nigerians in things like travelling, payment of their children school fees abroad, and obtaining medical services abroad.
One may be compelled to ask why the United States dollar has continued to rise while the Nigerian Naira keeps depreciating, the answer to this question is not far-fetched.
Demand for Dollar is Higher than Supply in Nigeria
The fundamental law of demand and supply is at work here and if this does no change, we may see more of the continuously increase in dollar rate.
Based on the fundamentals of demand and supply, the price of dollar will keep escalating as long as the demand outstrips the supply. The dollar rate would have been expected to drop if the supply surpasses the demand.
The drastic and continuous drop in oil price has reduced the countries income, while there has been a significant increase on Nigeria’s dependence on foreign services and goods.
According to records, 80% of Nigeria’s export is generally oil, so whenever there is a drop in the price of oil, the country’s revenues goes down inevitably.
Currencies are either convertible or nonconvertible, several Third World countries do not have convertible currencies. Sadly, Nigeria is one of these countries whose currencies are not convertible, it is therefore risky for someone to hold such a currency because it may be very challenging to try changing it to another currency.
Foreign investors calculate their values and business worth in dollars, this is why many of them are careful due to the depreciation of the Naira, the continue decrease in Naira poses a big risk to investors.
Countries with convertible currencies always have economic growth, and political stability. Some of the countries with convertible currencies are, Japanese Yen, Us Dollar, British Pound Sterling, and the Euro, etc. The Chinese Yuan is one of the countries that have partially convertible currency.
When a country has a convertible currency, it gives investors more confidence to invest in that country. The Nigeria Naira is not a convertible currency and this is one of the major reasons it keeps depreciating while dollars keep increasing because of its demand an the reasons stated above.
Effects of dollar rate on commodity prices in Nigeria
This article will explain the effects of the increasing dollars rates on the prices of commodities in Nigeria. If you have been wondering why the prices of commodities are not as you would expected them to be, this article will give you a good insight on why the prices of commodities in Nigeria are affected.
The rate of the U.S. dollars has continued to escalate while the Nigerian naira has gone in the opposite direction. The is no denying the fact that prices of imported goods and services have skyrocketed in an alarming rate in the past 1 year as a result of this incessant increase in dollar rate..
These increases have affected the economy of the nation negatively owing to the fact that Nigeria is a country that depends on imported goods and services to survive.
Nigeria is one of the third-world countries that have non-convertible currencies, this is why payments for imported goods can not be made with the Naira.
The Naira is only accepted in Nigeria as a means of payment for goods and services. There is no other country that accepts the naira as a legal tender, this is one huge advantage that the dollar has over the naira, the dollar is accepted in almost all the major countries in the world as a means of payment..
With the above explanation, you can see that the dollar plays a major role in the Nigerian economy, a strong dollar is bearish for prices of commodities in Nigeria.
What is making Dollar Rate to continue increasing in Nigeria?
There are many factors that are behind the continuous escalating of the U.S. dollars in Nigeria. One of those factors is that the demand for dollars is more than the supply. The fundamental law of demand and supply is what has contributed to the constant increase in the dollar rate in Nigeria.
Businessmen and importers use dollars to pay for their imported goods and many other Nigerians also use dollars to pay for services overseas. The constant demand for dollars by Nigerians is one major factor that has contributed to the continuous escalating of dollars.
The idea of Nigeria operating a mono-product economy makes it almost difficult for the country to control it’s economy, the economy of the country is almost controlled by external factors.
The fact that Nigeria depends mainly on oil is another reason the Naira keeps depreciating especially when there is a drop in the price of oil.
The Covid-19 pandemic also contributed hugely to the increasing rate of the U.S. dollars especially in Nigeria. The demand for the U.S. dollars has increased globally and the effect of this is mostly felt in Nigeria.
Every Nigerian will agree that the prices of commodities has drastically increased especially in the past one year. This article will try explaining how the increasing dollar rate is affecting the prices of these commodities.
How Dollar Rate is Affecting the Prices of Commodities in Nigeria
The increase in dollar rate affects the prices of commodities in Nigeria in many ways. Prices of imported items like rice has skyrocketed as a result of the increasing rate of dollar.
If a bag of rice was imported at $50 when a dollar was N300, that would be N15,000. Now that one dollar is about N440, the imported price for the same quantity of rice is N22,000.
The amount for clearing and shipping has also increased as well because most of the clearing and shipping payments are made with dollars. Once the fees for clearing and shipping increases, there is bound to be a corresponding increase in the price of the goods.
This is why we have an alarming increase in the prices of commodities in Nigeria, the more dollar keeps increasing, the more the prices of these goods will correspondingly increase.
Secondly, most of the equipment used in manufacturing local commodities are imported, this means that they are being purchased with dollars. Surely, the dealers of these commodities will have to increase the prices of their finished prodcuts so it can cover the cost of production which involves the purchase of the equipment.
The increase in dollar rate has also increased the price of transportation, buying a car now is more expensive than it was in the past 2 years. This is because cars are not manufactured in Nigeria, they are imported and as such, any increase in dollar rate in Nigeria means that a buyer will buy the car at a much more higher rate more than what should have been paid.
Let us say that the person bought the car to use as public transport, after buying the car in an amount that is higher than what he or she expected, his transport fare pricing will surely increase. If this increases, it will affect the price of commodities because the seller of those commodities will increase prices after spending more than usual on transport.
These are a few of the different ways that dollar rate has affected the prices of commodities in Nigeria.
How to Open Dollar Account in Nigeria Online
If you are among the people that have been surfing the internet to find information on how o open dollar bank account online in Nigeria, this post will be of tremendous help to you. In this post we will tell you everything you need to know concerning the opening of dollar account online in Nigeria and why you need a dollar account.
We will also explain what dollar account means and answer several online questions that were asked regarding the opening of dollar account online in Nigeria, see some of the questions below.
- Can I open a USD account in Nigeria?
- Which bank can I open dollar account in Nigeria?
- How do I open a domiciliary account online in Nigeria?
- How can I fund my domiciliary account?
- What are the benefits of domiciliary account?
What is a Dollar Account
A dollar account officially known as a domiciliary account is a bank account you open in Nigeria that enables you to receive and withdraw foreign currencies. It is an account that is not operated in the Nigerian naira but foreign currencies. A domiciliary account gives you the opportunity to operate a bank account with any of the three global currencies. With a domiciliary account, you can receive money in either United States dollar, British Pounds, or Euros.
Types of Domiciliary Accounts
There are mainly two types of domiciliary accounts, they are;
- Domiciliary Savings account, and
- Domiciliary Current account.
Can I open a USD account in Nigeria?
You can open a USD account in Nigeria, it is one of the bank accounts that is very necessary for businessmen, investors, people whose business partners, relatives and friends who are staying overseas often send money to them.
Which bank can I open dollar account in Nigeria?
You can open a dollar account in any of the licensed deposit money banks also known as commercial banks in Nigeria. There is no specific bank that you can only open the dollar account with. Example of the commercial banks you can open a domiciliary bank account with are; Zenith Bank, First Bank, Union Bank, Access Bank, Guarantee Trust Bank (UBA), Fidelity Bank, United Bank of Afrca (UBA), Ecobank, and First City Monument Bank (FCMB).
Requirements to open a dollar account in Nigeria online
The requirements to open a dollar account online in Nigeria is the same requirements you will have to meet if you walk into any of the banks by yourself to open a dollar account.
Below are the requirements to open a dollar account online in Nigeria.
- Government Approved means of identification; driver’s license, national Identity Card, voter’s card, or International Passport.
- 2 recent passport photographs/
- Bank Verification Number (BVN)
- CIU Form
- Current Utility Bill
How do I open a domiciliary account online in Nigeria?
Most of the banks allow people to open a dollar account online. What you should understand is that the process of opening a dollar account is the same as opening a naira savings account.
If you want to open a dollar account online in Nigeria at Union Bank;
- Visit: https://www.unionbankng.com
- Scroll down to ‘Account Opening Form’, click on it.
- Three forms will be displayed, that is ‘Account Opening Form, Signature Form, and Reference Form’. Click on each of them, they will be downloaded automatically into your phone of PC.
- Ensure to fill all the forms you have downloaded.
- Once you have filled them out, email the forms to firstname.lastname@example.org.
If you want to open a dollar account online in Nigeria at Zenith Bank;
- Visit: https://www.zenithbank.com
- Scroll down and click on ‘Download Account Form’. will be downloaded automatically into your phone of PC.
- Ensure to fill all the forms you have downloaded.
- Once you have filled them out, email the forms to: email@example.com or take the form to any Zenith Bank that is close to you.
The process of opening a dollar account online in Nigeria at UBA is a bit different from other banks.
- Visit: https://www.ubagroup.com
- Scroll down and click on ‘ Open Account’
- A new page will open, click on ‘Select Country’ and choose Nigeria.
- Once you are done, click submit.
- Select account type ‘Choose UBA Nigeria Account’ by clicking ‘Open with BVN’.
- In the new page that opens, insert your BVN, BVN registered phone number, date of birth, email address, and choose ‘Freedom Savings Domiciliary’ as account type.
- Agree to the terms by clicking on the red circle below.
- Once you are done, click ‘Next’.
- Insert the OTP that has been sent to your phone, upload your passport photograph and click next.
- Fill in all the requirements and submit.
How can I fund my domiciliary account?
Funding your domiciliary account is just like funding your naira account, the only difference is that you fund them with either United States dollars, British Pounds, or Euros.
You can fund your domiciliary accounts through traveler’s cheques, cash deposits, or foreign currency cheque deposits.
It is impossible to fund your domiciliary accounts with the Nigerian naira. You can always buy foreign currencies from your bank or other commercial banks to fund your domiciliary account.
What are the benefits of a domiciliary account?
The major benefit of operating a domiciliary account is that it allows you the liberty of carrying out monetary transactions in any of the three world currencies, that is United States dollars, British Pounds, and Euros.
How to buy and sell dollars in Nigeria – requirements, license, things you need
This article will give you the information you need to know regarding how to buy and sell dollars in Nigeria. We will also talk about the requirements and details about obtaining the license.
There are several questions we will provide answers to concerning how to buy and sell dollars in Nigeria.
- How do I get my BDC license?
- How do I start a currency exchange business?
- How much is BDC license in Nigeria?
- How many BDCS are in Nigeria?
- What is BDC license?
- What is BDC Nigeria?
- Is bureau de change profitable in Nigeria?
- What company is BDC?
Buying and Selling dollars and foreign currencies in Nigeria
Buying and selling of dollars and other foreign currencies is one of the most lucrative businesses in Nigeria. This is because of the incessant demand for the United States dollars by Nigerian businessmen and women, politicians, and students planning to study abroad.
Nigeria is an import-dependent country, this is why the business of buying and selling of dollars and other foreign currencies is booming and very profitable. The daily demand for foreign currencies in Nigeria has always been on the increase and this makes the business of buying and selling of dollars and other currencies very lucrative.
However, due to the sensitive nature of the business, not everyone is authorized to buy and sell foreign currencies in Nigeria. You must meet certain requirements and conditions to be able to buy and sell dollars and other foreign currencies in Nigeria.
How do I start a currency exchange business?
Starting a currency business in Nigeria has certain requirements. One thing you must understand is that apart from the commercial banks that are authorized to buy and sell foreign currencies, you would need to become a Bureau de Change operator in Nigeria to be officially allowed to buy and sell dollars in Nigeria.
Until recently, it was possible for registered and licensed Bureau de Change operators in Nigeria to buy dollars at the official rate from the Central Bank of Nigeria and sell at parallel exchange rate.
However, the apex bank recently banned the sales of dollars and other foreign currencies to Bureau de Change operators. The CBN accused them of masterminding and promoting money laundering in the country.
They were also accused of negatively affecting the stability of the naira currency by selling foreign currencies at very high exchange rates.
However, to start a currency exchange business in Nigeria, you must be registered as a Bureau de Change operator.
What is BDC Nigeria?
BDC Nigeria simply stands for Bureau de Change operators in Nigeria. The BDC is a retail foreign currency exchanger specializing in the business of Personal Travel Allowance, Business Travel Allowance, payment of foreign school fees, and payment of foreign medical bills, which are approved by the apex bank.
The Bureau de Change played an important role in the Nigerian foreign exchange market. Just like the global mandate of the BDC is, they cater for the pocket foreign exchange demand of individuals and small and medium-sized enterprises in Nigeria.
Their reach and accessibility made it convenient for several people to carry out foreign exchange transactions in the country. However, the few bad eggs among them blatantly abused this privilege and mandate by indulging in fraudulent and greedy practices which promoted corruption and money laundering.
This is why the CBN banned the sales of dollars to the Bureau de Change operators.
What company is BDC?
A Bureau de Change (BDC) company is a retail foreign currency exchanger specializing in the business of Personal Travel Allowance, Business Travel Allowance, payment of foreign school fees, and payment of foreign medical bills, which are approved by the apex bank.
Is bureau de change profitable in Nigeria?
The Bureau de Change business is a very lucrative business and the patronage is high in Nigeria. The business is like someone starting a mini bank business. Once an individual can meet the requirements, hitting hundreds of millions will become a reality in no time. It is a business that requires accountability, transparency, and liquidity.
How many BDCS are in Nigeria?
As at the last list which was released by the Central Bank of Nigeria, a total of 3147 Bureau de Change operators are working in Nigeria, these operators are spread all over the country.
How much is BDC license in Nigeria?
To get licensed as a Bureau de Change operator in Nigeria, the company has to pay a nonrefundable fee of N1 million. The company is also required to have a minimum capital of N35 million in CBN before being granted the license.
How do I get my BDC license?
Applying for BDC license is of two stages. The two stages are Approval-in-Principle (AIP), and Final License.
To apply for the Approval-in-Principle, the company must submit a formal application to the Governor of CBN requesting for Approval in Principle to be granted to the company to carry on Bureau de Change business in Nigeria.
A non-refundable fee of N100,000, and evidence of payment of minimum capital of N35 million which must have been paid into a designated account in CBN.
The company must submit a copy of their business plan or feasibility study which will include objectives and mission of the proposed BDC, the proposed BDC’s offered need gap in services and other relevant documents.
Once the Approval-in-Principle has been granted, the company is required to apply for the final licence within six months.
To apply for the Final Licence, the company must submit an application for the grant of final licence, it should be addressed to the CBN Governor, Abuja.
The application letter should be accompanied with evidence of a nonrefundable licensing fee payment of N1 million. Details and CVs of top management members of the proposed Bureau de Change company should be attached, as well as evidence of incorporation with CAC, and evidence of suitable office accommodation.
Once the requirements have been met, the CBN can grant the final licence to the Bureau de Change company, this is when you can officially buy and sell dollars and other currencies in Nigeria.
10 Reasons for Dollar Shortage in Nigeria
This article will focus on the reason there has been dollar scarcity in Nigeria in the past years. If you have been searching for information regarding dollar shortage in Nigeria, this post will give you a full information about this.
How important is the dollar to the Nigerian economy?
The United States dollar is the most important foreign currency in the Nigerian economy. This is because Nigerian importers make use of the U.S. dollars to import goods from other countries into Nigeria. Nigeria, being a country that imports more than it exports tends to make more use of the dollar even more than its local currency.
Another thing that makes the dollar so important to the Nigerian economy is the fact that the country’s economy depends on oil as its main means of generating foreign revenue, since oil is valued and purchased in dollars, it therefore makes dollars to become a major player in the Nigerian economy.
This is why all sectors of the Nigerian economy suffer each time there is scarcity of dollars in the country.
10 Reasons for Dollar Shortage in Nigeria
Below are several reasons why we have dollar shortage in Nigeria, most of these reasons are interconnected. Read them carefully.
- Drop in Oil Prices
It is not surprising that this is the first reason on our list, crude old accounts for 85% of the nation’s import revenue and 55% of government revenue. Since crude oil is priced and purchased in dollars all over the world and Nigeria is solely relying on oil to earn dollars, the dollar becomes very important. What this means is; higher price of oil equals to more dollars, lower price of oil per barrel equals to less dollars.
Another major reason for shortage of United States dollar in Nigeria is the high level of importation in the country. The fact that Nigeria imports more than it exports means that more dollars are sent out than what is coming into the country. Over $50 billion worth of goods were imported as at 2019, Nigerian importers constantly use dollars to pay for these goods and also pay for the shipping and clearing. This constantly sends dollar out of the country which is more than the dollars that are coming into the country.
- Numerous Medical Trips to Overseas by Nigerians
This is one of the reasons that dollars reduce in Nigeria. You will agree that lots of Nigerian elites prefer going overseas for medical treatment rather than receiving the treatment in Nigeria. As they keep embarking on these trips, they need dollars to pay for flights, finance their stay and also pay for the medical bill. While this further weakens the value of the Naira, it also contributes to the shortage of the United States dollar in the country.
- Thousands of Nigerians Studying Overseas
This is another reason we have dollar shortage in the country, a lot of Nigerian parents are sending their children to colleges and universities overseas. They need the U.S. dollar to pay for tuition fees, feeding and accommodation for their children. Each time they want to send money to their children, they need to sell naira and buy dollars to be able to send to them, this further depreciates the value of naira and makes the dollar stronger. It also increases the demand for the dollar thereby causing its shortage in the country.
- Lack of Foreign Investments in Nigeria
Lack of foreign investments in the country has reduced the amount of the United States dollars coming into the country. When investors go into any country to invest, they are possibly going with dollars because it is the global currency, this increases the availability of dollars in that country. This is not the case in the Nigerian economy. Corruption and insecurity has scared away foreign investors from coming into the country to invest.
As long as we are not having different means whereby dollars come into the country and we keep spending more dollars on importation, there is bound to be shortage of dollars.
- Money Laundering
Although many economists do not like talking about this, it is one of the factors that have contributed to the shortage of the United States dollars in the Nigerian economy. Many Nigerian politicians launder money to other countries, these monies are mostly taken out in dollars because naira in a nonconvertible currency and won’t be accepted in other countries.
This is why these politicians change the naira to dollars to be able to take them to any part of the world, this contributes to the shortage of dollars in Nigeria.
- Nigerians preference of dollar over naira
Several Nigerian investors and business owners are gradually dollarizing their investments and assets. They are selling off their naira investments to buy dollars because of the fragile nature of the Nigeria economy and the instability of the Nigerian currency. This has led to more demand for dollars which has increased its worth and caused dollar shortage in the country.
- Low Exports
Nigeria is experiencing shortage of the United States dollar because the number of exports is lower then imports. The higher the number of goods and services exported overseas, the more dollars we will have in the country. But when the situation is a complete reverse, there is dollar scarcity because importation has continued to remain high.
- Stashing dollars at foreign reserve
You may be surprise that we have listed this as one of the factors that causes shortage of dollars in Nigeria. Well, here is the thing, the Central Bank of Nigeria constantly hunts for more dollars to store at the foreign reserve. The CBN needs more dollars to be able to manipulate the market and try stabilizing the exchange rate of the country’s currency. This is a serious reason why the dollar becomes scares sometimes. In order to keep the exchange rate stable, the CBN needs more dollars in the bank. You can now see that the CBN is hunting for dollars just like Nigerian exporters are hunting for it.
- Nigerians preferring foreign imported products to local products
This is why there is a low demand for locally made products while the demand for foreign products has continued to rise. As long as consumers prefer the imported goods, Nigerian companies will not be encouraged to market locally made products, they will look at importing the foreign ones and this means they need dollars to purchase them. This automatically contributes to the shortage of dollar in the country.
Dollar to Naira Forecast: Naira to Dollar Prediction by Months, Years in the Future
This article will give you a forecast on the dollar to naira exchange rates in the nearest future.
We will give you a prediction on how the United States and Naira may perform against each other.
The United States dollar has been the stronger currency between the two of them in the past years.
However, before we give you the forecast and future predictions between the U.S. dollar and naira, let us briefly tell you how important the U.S. dollar is to the Nigerian economy.
The dollar to naira exchange rate has remained a vital aspect of the Nigerian economy management from the early 1970s.
The role of the United States dollar in the Nigerian economy
The United States dollar plays an important role in the economy of Nigeria. It is no longer news that the Nigerian economy is solely dependent on crude oil, if the crude oil is taken away, the Nigerian economy will collapse in its current state.
85% of the Nigeria’s foreign generated revenue and 55% of government revenues are derived from oil. Given the fact that oil is valued in dollars through the world, it makes the Nigerian economy more in need of the dollar at every time.
Nigerian citizens as a whole are appearing to be more comfortable with the dollars because of the alarming rate of inflation and the naira’s low purchasing power.
These sentiments has continued to negatively affect the stability of the Nigerian currency. Although dollarization is not official in Nigeria, many Nigerians have dollarized their investments, spending, and asset ownerships to continue being ahead of the continuous romance between the Nigerian economy and recession and also inflation.
Because of the increasing rate of the United States dollar against the Nigerian Naira, many Nigerians prefer to engage in businesses that earns them in dollars, this and many more has continued to heap pressure on the Naira.
Factors that has been causing the depreciation of Naira against dollar
Over the years, the Nigerian naira has suffered serious depreciation against the U.S. dollar. Currently, one U.S. dollar is worth as much over 400 Naira.
There are many factors that have influenced the depreciation of Naira against the U.S. dollar.
The incessant increasing prices of products and services has made the naira to continue depreciating. Local made goods are most times expensive than the imported ones, this is why people tend to prefer patronizing the imported ones, this has affected the value of the Nigerian naira negatively. The purchasing power of the Naira has reduced tremendously as prices of goods and services keep increasing.
- Over-dependence on Crude Oil
While crude oil has brought good fortune to Nigeria, it has also been the main reason why the Nigerian currency has continued to lose it value. Like we said before, oil accounts for about 85% of Nigeria’s export earnings, the knowledge of the fact that the Nigerian economy solely depend on crude oil for survival has made several financially savvy Nigerians to increase their dollarization.
As earlier states, oil is priced in dollars all over the world, this has made the United States dollar to remain a key player in the Nigeria economy at the detriment of the naira.
Insecurity is one of the major problems that has affected the Nigerian economy in a negative way. Many foreign investors are not ready to further invest in the Nigerian economy because of insecurity. We will agree that Boko Haram terrorists, bandits, killer-herdsmen, and other vices have destabilized the country in the past years, this has made several companies to fold up, several investors sell their investments and leave the country. This has affected cash inflow to the country and increased outflow, which explains the consistent report of dollar scarcity thereby giving birth to an increase in the value of the dollar.
An increase in the value of the United States dollar automatically translates to a naira depreciation.
Corruption has eaten deep into the economy of the nation, several politicians have laundered monies and invested them in properties overseas. Billions of Naira has been shipped out which has also increase outflow of cash in the country, this constantly weakens the naira.
Dollar to Naira Prediction by Months (Source: USDforecast)
Below is the dollar to naira forecast for October and November 2021.
Below is the dollar to naira forecast between 2021 – 2025.
Disclaimer: Infoguidenigeria.com does not set or determine forex rates. The official CBN rates are obtained from CNB.gov.ng, NAFEX rates are obtained from the website of the FMDQOTC. Parallel market rates are obtained from various sources including online media outlets (sources well-cited). The rates you buy or sell forex may be different from what is captured in this article.