Growth of black market at Nigerian currency exchange

On the streets of the huge Nigerian city of Lagos, which home to 15 million people, the exchange offices are working on the verge of the law. They came to the attention of authorities in the country, who are trying to support the local currency Neira and destroy the black market for foreign currency, which grew after the fall in oil prices and the reduced flow of petrodollars.

This month the Central Bank of Nigeria introduced a ceiling on the exchange rate of the US dollar, at which the offices in the country can exchange dollars. Its level is bound and vary depending on the rate offered on the black market.

Moreover, the authorities officials go around all non-bank dealers and violators are sent to prison. This creates a parallel market in the black market.

On the other hand, some owners of exchange offices in Nigeria recognize that they will continue their practice and exchange of dollars of old courses, but only to known customers, as every new person can be a spy for the government.

Explain briefly the reason for the growth of transactions on the black market in Nigeria has imposed an official exchange rate of Neira, which, according to experts, support and service in the business. Because of the shortage of foreign currency, however, many licensed offices are forced to sell dollars at a much higher rate.

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