‘Japa’ Pushes UK Pound Rate To N920, As Nigerians Overwhelm Black Market

Nigerians’ quest to ‘Japa’ – a local parlance by youths connoting offshore escape from hardship and economic deprivation – has increased the value of the pound in ‘black market’.

 Bureau De Change (BDC) operators say that people interested in foreign trips are responsible for the pound exchanging at a rate of N920/£1 as of Thursday, December 29, 2022.

In a conversation with one of the Bureau De Change operators, it was learnt that the pound was also exchanged at N880/£1 at his BDC outlet on December 29, 2022.

This means that the pound exchange rate maintained its position reported on Wednesday, as Prime Business Africa had reported that the Bureau De Change operators offered to sale one pound between N880/£1 to N920/£1. 

It was also gathered from the Bureau De Change operators that they buy one pound from the public at an exchange rate between N870 and N890, similar to the exchange rate of N850-N890/£1 they offered on Wednesday to purchase the United Kingdom currency.

With demands for pounds growing among Nigerians seeking to travel out, the exchange rate will maintain its premium rate as availability remains low in black market, causing demand to overshoot supply.

CBN’s Emefiele also blames foreign trips

Recall that the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, had made similar assertion late November, stating that increase in student visas issued to Nigerians by the United Kingdom was affecting the exchange rate. 

Emefiele said about $2.5 billion in study-related foreign exchange outflow went to the UK alone in 2022, which is eight-fold surge when compared to 2020 figure. 

As such, the increase in the number of Nigerians leaving the country is mounting pressure on the value of naira, and increasing the value of foreign currencies like pound and dollar. 

“The number of student visas issued to Nigerians by the United Kingdom alone has increased from an annual average of about 8,000 visas as of 2020 to nearly 66,000 in 2022, which implies an eight-fold surge to about $2.5 billion annually in study-related foreign exchange outflow to the UK alone. 

“It is against the backdrop of the worsening mismatch between foreign exchange market demand and supply, and the need to boost foreign exchange earnings that the CBN and the Bankers’ Committee initiated the RT200 programme in February 2022,” Emefiele said.