edited with canva
Currency Devaluation is a huge economic issue arising in some nations of the world basically struggling under-developed nations or third world countries. The currency of a country is said to be devalued when it can no more purchase commodities in foreign exchange window without compulsory strain in the economy.
In Nigeria we encounter high currency devaluation as the cost of 1 USD to Nigerian Naira is about N670. The global inflation in the country would really take a toll on our currency. We could hardly purchase goods and services at affordable prices due to hike in prices of goods and commodity.
CAUSES OF CURRENCY DEVALUATION
High Importation Rate:
The Advent ofimportation of various products from diverse countries leads to currency devaluation because you reduce the job creation in your country and improve the work force of your trading country thereby using this of devaluation of currency.
Nigeria imports technology products such as television sets from China and spends lots of money to please investors developing bilateral agreement, while reducing currency value
Most countries cannot survive without foreign exchange. If goods are not imported the consumption of food and provision of commodity could not be achieved, therefore the quest for survival causes the outflow of monetary resources causing devaluation of currency.
Nigeria imports various products such as refined PMS or refined crude oil from countries as source of running the economy. Crude oil is our major natural resource, without importation of PMS we could be in several economic problems
Lack of Production Industries:
The production sector is a sector of economy that provides various opportunities to the populace through job creation for the people. The more production sector is harnessed in a country, the demand for product at international level becomes high leading to rise in the value of currency which is a major tool for exchange.
Nigeria produces cassava bread in large quantities and also cassava flakes too. If the nation harnesses these products and they are exported the value of the currency would be increased too.
SOLUTIONS TO CURRENCY DEVALUATION
The acquiring of skills by populace could be of immense help. Skills such as shoe production and paint production could increase rates of currency value when these products gets exported too.
The processing of food into rebranded and repackaged form enables the supply of these agro-based products in surplus and more captivating for which in turn export them alleviating currency devaluation.
Revitalizing Production Sector:
Nigeria had over 2000 industries which are presently closed down due to various challenges faced by the nation. If these industries could be revitalized, production of goods and services could be realised and if exported increase value of our currency, this ending currency devaluation.