In the 1970s, N1 exchanged for $2. In 1980, N1 exchanged for 80 cents. By 1985, the naira declined to N1=$1. The Gowon military regime, despite its shortcomings, ran an innately clean government. The Minister of Finance at the time was Chief Obafemi Awolowo. He managed the public finances with sagacity. Nigeria did not borrow a dollar from the international financial markets for the war effort or for the post-bellum rehabilitation and reconstruction. We were on the verge of industrial take-off.
By 1986, N2 was exchanging for $1. By 1992, $1 exchanged for N10. Misguided policies of structural adjustment, linked to profligacy, mindless printing of currency, round-tripping by commercial banks and rent-seeking behaviour by financial regulators were to blame. When the current APC regime came to power, the national debt rose to $86.3 billion , of which the domestic component is $53 billion and the foreign $33.3 billion. In 2014, our total national debt was 20% of GDP. Today, it stands at 35.51% of GDP.
With dwindling foreign reserves, there is a flight to safety in dollars. Increased dollarisation of the economy is further fuelling dollar scarcity while weakening the naira and reinforcing a vicious cycle of poverty and hopelessness.