What is Happening to the Naira?

The market value of the naira against the dollar as of July 2024 is around ₦1,480.00 to $1.00. This is a major drop from where it sat at roughly ₦400 to a dollar, before the Central Bank of Nigeria (CBN) announced its June 2023 decision to float the naira. This unprecedented fall in the naira’s value has been attributed to this decision to float which was heavily influenced by demand from the International Monetary Fund (IMF). The purpose of this latest policy was, among other things, to close the gap between CBN’s official exchange rate and the black-market rates. It was expected to be a step to better Nigeria’s economy in the long run. Yet, in the first week of the announcement, the naira’s value fell to ₦750 against the dollar, a drop of about 37 per cent, and has continued to trend downward. Why is this the case? Is the problem the policy or its execution? Nigeria is not the only nation that has adopted this monetary policy, but it is one of those not succeeding at it, despite this not being its first time doing it.