Investigation from the Guardian Newspaper claims that there are over one million black market operators of forex in Nigeria. The newspaper did not provide any empirical evidence to back up this claim but also confirmed that its sources are unverifiable.
“The Guardian investigation revealed there is an estimated one million street hawkers of foreign currencies, who constitute what is popularly known as ‘black market’ and are enriching themselves with the illegal business which they operate with the foreign currencies, the sources of which are unverifiable.”
Nigeria has for decades had a thriving black market for the forex with hawkers operating from run down hotels, street corners, popular markets or locations to ply their so-called illegal trade. The CBN believes black market operators constitute a small fraction of the foreign exchange market and should not determine to true value of the naira. However, many analysts do not agree as they believe the parallel market is the closest we have to a market that is self determinant with price.
The dollar sold on Xmas day for N256 after hitting an all time low of N280 on the 17th of December 2015. The CBN still maintains a managed float exchange rate system where it determines the price of the dollar whenever it intervenes at the inter-bank market. Critics have either called for a devaluation of the naira or a full float as the logical solution to Nigeria’s currency crisis.