2020 has been a whirlwind of events for all of us. While most of the world is still dealing with the global pandemic, Nigerians have faced an additional challenge even closer to home: the devaluation of their local currency Naira (NGN).
Between 2018 and August 2020, the exchange rate of Naira inflated from 306 NGN to 380 NGN to one USD. That means if you previously had 1,000 NGN in your savings, the amount has now shrunk to 750 USD—that’s a 25% decrease.
This incident, coupled with COVID-19, has had a profound impact on our Nigerian users. However, a few of our community leaders based in Nigeria have shared their advice for anyone navigating through the same situation.
What Naira’s devaluation means for Nigerian traders
The impact of the devaluation of Naira is international. With the inflated price, it’s more difficult for Nigerians to exchange Naira for other currencies. Mubarak, a 31-year-old owner of multiple businesses, told us that “The new regulation has stopped almost all means of transactions to other countries through bank transfer, the most used payment method in Nigeria.”
Happy, a 30-year-old full-time trader, provides a different perspective regarding cross-border trading, “If you buy BTC at a high rate, be mindful when you hold for too long because any rise in the price of Naira may lead to a fall in BTC price. It’s challenging to monitor the prices of both BTC and Naira, but you’ve got to stay alert.”
Interestingly, the devaluation of Naira has had positive impacts on Ebuka, a 27-year-old IT consultant. As Ebuka held funds in USD, he was actually able to profit when exchanging his USD to Naira. His family, on the other hand, doesn’t trade with foreign currencies and only earns money in Naira, so the impact has been minimal.
That said, the effects of COVID-19 are still palpable in everyday Nigeria.
What COVID-19 means for businesses in Nigeria
According to our Nigerian community, the shutdown of businesses means that goods and services have become more scarce and expensive for Nigerians. Families have to spend more on their basic needs, while lay-offs and pay cuts are also seen across the country.
The impact of COVID-19 has been immense for Mubarak, who owns an international modeling agency and a financial services business. On one hand, he can no longer verify new models into the agency so all signings have been put on hold; on the other hand, he can only open his financial services business three times a week now, significantly reducing the money he can make.
But as always, our community is resilient and has found different ways to weather the financial storm.
How our community is bouncing back from losses
While the devaluation of Naira has mostly affected those trading internationally, Ebuka is confident that trading in Naira can still lead to good earnings from arbitrage.
Mubarak has been actively introducing new users to the platform through our Affiliate Program, hoping to stimulate the market with new offers. Last but not least, Happy makes sure to not expect to get rich fast overnight and focuses on making small profits instead.
The reward structure of the Paxful Affiliate Program
Light at the end of the tunnel
Paxful is here for you when times are hard. With us, you can chat real-time with your trade partners from across the world, create your own offer terms with over 300 payment methods, and make money from sitting on your couch at home. We hope that our Nigerian community will stay strong and make the most of us to rebound from crises.
*The content of this article is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. The views and opinions of the named Paxful Peers are not necessarily the views of Paxful.
