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Claim: Several social media posts claimed that the US dollar was consistently equivalent to N22 throughout General Sani Abacha’s tenure as Nigeria’s head of state.
Verdict: Misleading! Abacha ruled as Nigeria’s head of state from 1993 to 1998. While $1 equalled N22 in 1993 and 1994, the naira depreciated to N82.33 to a dollar in 1995 and remained above N80 till 1999 using the Autonomous Foreign Exchange Market (AFEM) intervention rate.
Full Text
For some months now, many Nigerians have been using social media to decry the economic hardship in the country under President Bola Tinubu’s administration and its ripple effects on their day-to-day activities.
Discussions about the worsening economic situation intensified following recent reports online about a man who was unable to pay a N500,000 deposit for his wife’s maternal care, ultimately resulting in her death.
Amidst this, many compared the state of affairs under Nigeria’s democratic dispensation to the period of military rule. Some argued that the military regime gave citizens a more favourable economic outlook.
Proponents of this school of thought also argued that military rule remained the quick fix for the country’s extant economic challenges.
As the conversation raged, several pages and blogs on social media claimed Nigeria had a relatively stable economy when General Sani Abacha was Nigeria’s head of state and director-general of the armed forces.
The reports claimed the exchange rate during Abacha’s tenure was officially $1 to N22 and never surged above that fixed price until he died in office.
For context, those promoting the narrative did so to portray Abacha as ‘Nigeria’s saviour’ and to downplay criticisms of the late former dictator and the military’s tenure at the helm of power in the country.
Given the topicality of the issue and its implication on political discourse in Nigeria, DUBAWA fact-checked the claim to ascertain its veracity.
Verification
Abacha served as head of state from 1993 to 1998 after the uneventful outcome of the June 12, 1993, election.
He died on June 8, 1998. Some reports had claimed he died of a heart attack, though government sources did not say precisely what killed him.
CBN data indicated that the dollar-to-naira exchange rate was pegged at N17.30 to 1$ in 1992, and by 1993, it was N22.05, after which it was reduced to N21.89 in 1994. In 1994, the fixed exchange rate system was introduced “to create the right environment for strengthening the naira.”
This introduction also saw the centralisation of foreign exchange in the CBN, the restriction of Bureaux de Change to buy foreign exchange as agents of the CBN, the reaffirmation of the illegality of the parallel market, and the discontinuation of open accounts and bills for collection as means of payments sectors.
By 1995, the Autonomous Foreign Exchange Market (AFEM) was introduced to further liberalise the foreign exchange market. It allowed the CBN to sell foreign exchange to end-users through selected authorised dealers at market-determined exchange rates. Also, Bureaux de Change was once accorded the status of authorised buyers and sellers of foreign exchange.
Thus, the exchange rate moved from N21.89 to $1 in 1994 to N82.33 in 1995 and appreciated to N81.48 to one dollar in 1996. Using the AFEM intervention rate under the CBN’s control, it moved to N81.98 in 1997 and N84.84 in 1998.
At the same time, the exchange rate at Bureaux de Change stood at N83.69 to the dollar in 1995. It appreciated slightly to N83.15 in 1996, then moved to N85 in 1997 and N87.90 in 1998.
Conclusion
The claim that $1 equalled N22 throughout Abacha’s tenure as head of state is misleading. While the dollar did exchange at N22 between 1993 and 1994, it depreciated from 1995 until the end of Abacha’s regime, trading at N82.33/$1 in 1995 and remaining above N80 until 1999.
