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Fair exchange
Nowhere has a nation’s currency value seemed more arbitrary than in Nigeria.
As you arrive in the country and step into the main arrivals hall at Lagos Murtala Muhammed airport, there are a few official-looking kiosks with electronic displays offering up-to-date exchange rates. A few days ago, they were offering a relatively tight spread of 398-400 naira to the dollar, depending on whether you were buying or selling.
But before you get that far, a voice from behind whispers, “you can get a better price outside”
The stranger with the tip was right. Just outside the airport, one dollar fetched as much as 430 naira.
Apparently, this was a good deal, but not as good as the week before. In recent weeks the naira has blown past 520 to the dollar, as investors lost confidence in the economic machinations of the government and a scarcity of dollars bit hard.
The naira has recently rallied in the parallel markets after the central bank pumped dollars aggressively into the markets. It also announced separate rates for Nigerian students studying abroad, so they can buy at 375 naira to the dollar. This was seen by some as currying favor with the middle classes who can afford to send their kids abroad instead an overcrowded local university. It is one of several patches hastily applied to Nigeria’s broken forex system.
To be clear, the point of these recent moves to inject more dollars into the market is to narrow the spread between the official exchange rate of 315 naira to the dollar and the various parallel rates for different interest groups. Many analysts believe these are steps on the road to a formal devaluation.
In the meantime, almost no individuals and only a few businesses can get dollars at anything close to the official rate. This puts the few people that have access to these rates in a powerful position to exploit the arbitrage. It leaves most other Nigerians frustrated that, yet again, a lucky few are becoming very wealthy, very quickly off the inefficiencies and opaqueness of a system that should have been fixed long ago.
Yinka Adegoke, Quartz Africa editor
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No African winners in sight. For the second straight year, the Mo Ibrahim Foundation has not named a winner for its prize for Achievement in African Leadership. With only four winners named since the award’s inception in 2006, the foundation has insisted on refusing to lower the bar for Africa’s leaders. But by not naming winners, the foundation shines a light on accountability and democracy, writes Lynsey Chutel.
The life-saving power of mobile phones
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lags behind in refugee-focused innovation
.
CHART OF THE WEEK
Nigeria’s shrinking economy. Heralded as one of the world’s most promising economies a few years ago, the tide turned for Nigeria in 2016. Data from the country’s Bureau of Statistics confirmed a full year of negative growth—the first in 25 years, writes Yomi Kazeem.
Other Things We Liked
The secret network of journalists fighting tyranny in Burundi. As part of a bid to forcefully remain in power, Burundi’s president Pierre Nkurunziza, has focused on weakening the country’s independent press. Central to his government’s strategy is branding unfavorable reports as “fake news” and harassing journalists, writes Rossalyn Warren in The Guardian.
When African countries trade more with China what happens to labor rights? Researchers have identified a so-called ‘Shanghai effect’ on labor rights when China replaces countries like the United States as a leading trading partner. The “effect” refers to a reduction or even suppression of labor rights but its impact varies, write Christopher Adolph, Vanessa Quince and Aseem Prakash for the Washington Post.
The death of an Ebola hero. Liberian healthcare worker Salome Karwah died at 28, just days after the birth of her fourth child. Karwah had graced the 2014 ‘The Person of the Year’ cover issue of Time magazine as the face of Ebola fighters. NPR’s Ashoka Mukpo tells her story.
Kony Invisible Children 2017. Five years after the video about Ugandan warlord Joseph Kony went viral, David Gauvey Herbert, for Foreign Policy, finds that the NGO behind it has completely revamped. It is now behind a covert war effort against the Lord’s Resistance Army.
Keep an eye on
Ghana’s 60th independence day (Mar. 6). Ghanaians at home and abroad will be marking 60 years of independence of the former Gold Coast from British colonial administration.
Our best wishes for a productive and thought-filled week ahead. Please send any news, comments, suggestions for leadership prizes and good grades for credit scores to africa@qz.com. You can follow us on Twitter at @qzafrica for updates throughout the day.
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