By: Chukwudi Iwuchukwu
1) Earlier today, I was listening to economic projections for this year by Proshare
One thing struck me during the presentation.
The naira is projected to end the year weaker than it is now against the dollar.
Proshare is projecting that the naira will end the year hovering between 1,800 and 2,000 to $1.
Except two things happen to stop this.
CBN to resume selling the dollar to BDC, but Nigeria has run out of dollars, so this is not possible in the near term because we have run out of ammunition to defend the naira against the dollar.
Another scenario that will stop this projection by Proshare from becoming a reality is if Nigeria can urgently access the $7 billion lifeline, which is expected to stabilise the local currency against the greenback.
In the absence of these, the naira will wobble and struggle all this year and will likely end close to 2000 to one dollar by December 2024.
Sad news, right?
2) Many young people I know doing businesses in Nigeria and who earn in Naira had a good year last year.
Many of us made our first 100 million, 500 million, and even 1 billion last year.
But when you convert the money you made as an entrepreneur doing business in Nigeria to dollars, you will realise that it is not what it used to be, let’s say 4 years ago, so you are poorer and worse off.
The implication is that you are making more naira as a businessman, but your purchasing power is declining and going down.
What 1 million can afford 4 years ago, it can’t buy the same thing today, even though you are making more naira, but you are actually getting poorer.
In 2019, I bought an SUV for 4 million ($11,000 at the time), and I was over the moon as I was so happy.
If I’m to buy the same car again now
The price is 12 million for a car that was manufactured by Toyota when George W. Bush was US president in 2009.
So, you see, the more naira you make, the poorer you become.
3) It was Bill Clinton who made this phrase popular.
“It is the economy! Stupid”
relating this quote to our realities as young Nigerians.
The volatile naira that is unstable against the dollar has rendered so many of us poor, even though we are making money that some of our parents did not make or see in their lifetime.
But the rampaging inflation is wiping all that effort and the money away.
It is projected that Nigeria will continue to witness double-digit inflation until 2030.
It is that bad.
Even at that, all hope is not lost.
4) In 2016, I met a big man called Dr. Samuel Maduka Onyishi, MON
He is the chairman of Peace Mass Transit and chancellor of Maduka University, Enugu.
He changed my life by adopting me so as to mentor me so I could be a big man like him tomorrow, by learning from his examples.
One of the things he taught me in 2016 when he started mentoring me was to pay attention to what banks were doing to make money.
That is the easiest way to make money as a young person living in Nigeria, and he is right.
In 2016, Nigerian banks were printing free money and doing nothing by just investing in Treasury bills.
Treasury bills paid a 21% yield that year, so if you invest 1 million in Treasury bills in 2016, you will end up with 1.2 million.
100 million will give you 20 million in profit, and 1 billion will give you over 200 million in free money as profit.
So banks that had disposable cash in their custody turned to Treasury bills, and they made money that no business in Nigeria at that time made, with the exception of Dangote and BUA cement.
Banks were investing as much as 20–30 billion naira on Treasury bills alone and then stayed back to enjoy the free money that comes with it.
The craze for Treasury bills is over.
Nigerian banks have turned their focus to another niche, which is dollars.
Last year, all the banks in Nigeria had a record-breaking year.
UBA made over 100 billion in profit.
The same is true with Zenith Bank.
It was the same year that Nigerian breweries declared a loss for the first time in history.
The same is true for Unilever and Cadbury, which all declared losses.
While banks are cashing out
Businesses in the real estate sector are struggling and declaring losses.
Our job, drive, and focus this year as young people living in Nigeria is to copy the same template that gave banks a lot of money last year.
The template was simple.
Earn, buy, and hold dollars.
It sounds simple, right?
For many banks that had a good year last year,
What they did was simple.
Buy a lot of dollars when it was 440 at the official market, and then hold
When the naira was devalued from 440 to 770 by this government, the difference between 440 and 770 was what gave UBA 100 billion in profit without sweat.
And this honey moon that banks are enjoying will continue this year.
If we are to have a good 2024, it means we must desperately copy what worked for banks last year.
This year, do all you can to make sure you don’t only earn in Naira; you also earn in dollars as well.
Hedge and diversify your income.
This, for me, is the urgency of the moment and what will separate the big boys from the small boys by December this year.
You don’t need a prophet to tell you this.
My friends who earned in dollars last year are doing better than me because they are earning to hedge against inflation, while I earned only in naira, which made me poorer.
But I want to change that narrative for myself this year, and I will advise you to do the same too.
So as a young person,
You can learn skills that can fetch you a dollar income while still living in Nigeria, which include
I) Blogging
(Bloggers earn dollar revenue from AdSense.)
11) Starting a YouTube channel
My friend’s wife is earning in dollars while living in Abija because she has a YouTube page that pays her dollars every month.
111) Learn forex trading, US stock trading, and crypto trading as well.
My friend Ember Lim is a guru in this US stock trading thing, so you can contact her for direction.
Julius Elum Is a guru in crypto, you can contact him too for direction.
1V) investing in US mutual funds
My Oga, Isu Egwu Okwudili works with Cowry Wise, an investment company regulated by the SEC, he is the head of their Abuja branch so you can contact him to guide you on how to go about investing in US mutual funds.
V) And then working as a virtual assistant while in Nigeria or starting a commodity business that exports cash crops from Nigeria to Vietnam and India.
I have a friend who exports cashew nuts from Nigeria to India, China, and Vietnam.
He is way richer than me because he earns dollar revenue from his export business, while I earn only in miserable naira.
VI) If you don’t have the appetite for risk or time to learn this,
You can do nothing more than buy a dollar by converting your disposable naira revenue to a dollar, and then hold it till next year.
6) We are living in dangerous, perilous times, my people.
Because of the naira’s instability against the dollar
More people will be pushed into poverty this year for no fault of theirs; other than that, we have wicked people ruling us as our leaders.
But we can build a buffer by doing all we can to hedge against inflation and protect ourselves from the wickedness of our leaders by earning in dollars this year.
Your future self will thank you for choosing this.
By the end of the year, you will be the next Agba baller that Flavour sang about, balling hard because you were proactive in protecting your income from inflation.
