Every year, the naira fights valiantly for its life with little success, and 2023 has been no different. The year started on a hopeful note. With the 2023 general elections scheduled for the first quarter, many young Nigerians were optimistic about a government change that would mean a long-overdue improvement in the economy and other sectors.
The elections ended with one of the most keenly contested results in Nigeria’s history and the results have contributed in no small way to the many ups and downs (mostly downs) Nigerians have experienced money-wise since.
This is a timeline of 2023’s most important money events and conversations.
New fuel prices (Part 1)
Nigerians aren’t strangers to fuel scarcity, but the 2022 floods and reports of adulterated fuel brought us the worst version we’d seen at that point. Unstable fuel prices followed us into January 2023, with fuel stations selling at between ₦200 – 250 per litre against the standard ₦167. The Federal Government officially standardised fuel prices at ₦185 per litre on January 19, 2023, and sent a memo to petroleum marketers informing them of the same. Lagos State even created a timetable for filling stations to further beat the scarcity. By April, fuel sold at ₦254 per litre.
THE STORY: Nigeria has Standardised Fuel Prices. But Our Problems Are Not Over
The cash scarcity saga
Godwin Emefiele first announced the redesign of the ₦200, ₦500 and ₦1000 notes on October 26, 2022, with a January 31, 2023, deadline to phase out the old notes. What followed was a series of events fit for a telenovela. The Minister of Finance, Zainab Ahmed, claimed she wasn’t informed. The naira soon fell sharply in the foreign exchange market — selling at ₦1,000 to £1 and ₦800 to $1. By January 2023, the new notes still weren’t in circulation.
The CBN moved the deadline to February 10, but two days before the new deadline, the Supreme Court gave a temporary order to halt the expiration of the old notes. In response, President Muhammadu announced that only the old ₦200 notes could remain in circulation beyond February 10. While experts debated on whether the president could overturn the Supreme Court’s ruling, Nigerians suffered the brunt of widespread cash scarcity and bank transaction failure.
The ATMs were either empty or limited to ₦5k daily withdrawals. Bank queues were longer than a Fela album. This led to protests across the country — several banks and ATM points were set ablaze. Most institutions were ill-equipped to accept cashless payments. Patients were left untreated as family members went on the hunt for cash. People were left stranded in supermarkets after botched POS or bank transfer transactions. A pregnant woman in Kaduna reportedly died because her husband couldn’t get cash in time for her to be admitted to a health centre. Pure chaos.
THE STORY: What Has the Naira Scarcity Cost Nigerians?
The rise of POS agents
POS agents quickly became major players in the scarcity as Nigerians turned to them for urgent cash needs. But the agents had to brave the long ATM queues or buy the scarce new notes at high rates, which reflected in their transaction charges. In Ekiti, POS charges increased from ₦20 per ₦1k withdrawal to ₦300 per ₦1k. In Lagos, POS agents charged as much as ₦2k – ₦3k to give ₦10k cash.
While all this was happening, the Nigerian government was focused on the February 2023 elections. It wasn’t until March that the Supreme Court and CBN confirmed all old notes would remain legal tender till December 31, 2023. In November 2023, the Federal Government asked the Supreme Court to extend this deadline yet again for an indefinite period. And one is forced to ask: Why all the wahala in the first place?
THE STORY: The #NairaLife of a POS Agent Forced to Plot New Business Moves
“Fuel subsidy is gone”
Those were President Bola Tinubu’s famous words in his inaugural speech on May 29, 2023. Right away, fuel stations started hoarding fuel, leading to another scarcity within months of the last one, panic buying and transportation hikes across the nation. The few open fuel stations sold at ₦500 – ₦700 per litre even before the new prices were announced.
The official prices ended up going as high as ₦557 per litre. By July 2023, it had climbed to ₦617 per litre. Fuel rationing led to a decline in fuel consumption nationwide, fewer cars on the streets as people took to trekking, increased cost of goods and services hinged on transportation and general hardship. E-hailing cab drivers even went on a nationwide strike, requesting an increase in fares as they could no longer work with the new fuel prices.
President Tinubu claims that fuel subsidy removal saved Nigeria over ₦1 trillion in two months, which “will now be used more directly and more beneficially for you and your families.” What this means exactly and how it will be done isn’t clear right now.
THE STORY: Fuel Subsidy: Tinubu Went off Script, and Nigerians Are Facing the Brunt
Student loans with a jail-time caveat
President Tinubu signed the Student Loan Bill into law on June 12, 2023. The bill, which should provide interest-free loans to indigent Nigerian students, was received with mixed reactions. Nigerians expressed concern over the loan requirements and two-year imprisonment punishment for defaulting on repayment. The Student Loan Scheme is expected to kick off in January 2024.
THE STORY: The ABC of Nigeria’s New Student Loan Bill
Foreign exchange goes south
On June 14, 2023, the CBN released a press release announcing its decision to allow the naira to “float” in the foreign exchange market, with hopes that it’d bring our currency to a unified exchange rate. This came after Tinubu suspended former CBN Governor Emefiele on “financing terrorism” charges. The policy change meant the CBN would no longer determine the exchange rate, and the rate at which the naira gets exchanged for any foreign currency is dependent on the agreed price reached by the buyer and the seller.
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The naira fell by 36% against the dollar on the official market and sold at ₦750 to a dollar from the previous ₦477 to a dollar. Some experts commended the float, expecting the rate to stabilise over time and positively impact investor confidence. Others, like Femi Falana SAN, criticised it as illegal.
THE STORY: Losers and Winners from CBN’s Unified Exchange Rate Policy
School fees 200% hike
In July 2023, the Federal Ministry of Education (FME) announced a school fees hike from ₦45,000 to ₦100,000 for new students of Federal Government Colleges. This came despite appeals by the Nigerian Parents Forum in June 2023. Federal universities like the University of Lagos (UNILAG), the University of Nigeria (UNN) and the University of Maiduguri (UNIMAID) also announced hikes by as much as 200%, to the dismay of students and parents alike. While the presidency argued that tuition is still free, the schools increased their miscellaneous levies, citing prevailing economic realities and the high cost of living.
Mass business closure and layoffs
In August 2023, Pharmaceutical company GlaxoSmithKline (GSK) announced its decision to exit the Nigerian market after 51 years of operation, due to foreign exchange scarcity and volatility, rising business costs and a shrinking consumer base. Procter & Gamble, Unilever, Sanofi, Jumia Food and Bolt Food, joined the exodus, contributing to mass unemployment in a country with 71 million citizens already living in extreme poverty. Nigerian-based companies and small businesses weren’t spared either. 20 out of the 175 textile companies in Nigeria were forced to shut down. Due to the rising cost of maize, poultry farms followed. Tech companies like Bolt, Alerzo and Jumia, conducted mass lay-offs to stay afloat.
Nigeria’s new $1.95 billion loan
Between June and September 2023, President Tinubu took out three loans from the World Bank to fund the power sector, women’s economic empowerment and the Adolescent Girls Initiative for Learning and Empowerment (AGILE) project. These loans are in addition to the country’s outstanding external debt of $14.51 billion to the World Bank.
RELATED: Tinubu Wants Nigerians to Endure, but Can He Follow the Memo?
Money supply rises
The CBN revealed that the total amount of money available in Nigeria’s economy rose to ₦66.4 trillion in September 2023. But before you think, “Finally, a highlight!” This doesn’t mean we’re swimming in money. A larger money supply indicates declining interest rates, inflation and decreased purchasing power. Essentially, not good.
Highest inflation in two decades
The naira entered a free fall between September and October 2023, reaching a historic low of ₦1k/dollar and earning the tag of “one of the worst-performing African currencies” from the World Bank. In the parallel market, it sank as low as ₦1,170/dollar. Inflation rose to 26.72% in September — the ninth straight increase in 2023 and the highest in 20 years. Food inflation rose to 30.64%, adding to the food and living crisis across the nation.
THE STORY: What’s the Real Cost of Inflation? Five Nigerians Tell Us
Drug prices soar as high as 1000%
Remember GSK Nigeria’s departure? As of November 2023, it meant drug prices had increased by up to 1000%, especially affecting inhalers and antibiotics. There has also been a reported drug scarcity due to the massive devaluation of the naira and a less-than-optimal business environment, leading to panic among consumers.
NEXT READ: The Year in Review: These Events Drove The Hottest Conversations in 2023
