I noticed that there is a gap of over 10% between the official exchange rate and current black-market rate. While the official rate crashed around July 1st to 150naira per US Dollar, your mallam will sell to you not at 153 (for a typical 2% spread) but around 166 (a very atypical 11% difference).
It makes sense that the official rate is low; the dollar is so poorly that no currency has a right to do worse, but how do you explain the high dollar price on the streets? The newspaper (ThisDay) is reporting that this is due to a shortage of dollars created by a Central Bank policy pegging dollar supply to Bureaus Des Change.
If only we could automatically change currency at the points of use, like I used to do with my U.S. Visa debit card. It basically got you any currency - even Naira, at local ATMs - at the best possible exchange rate. But now I have a Nigerian visa card that accomplishes much less. The bank offers a "dual-currency" debit card as well, but the processing time for that application is about four months. They assured me they were not kidding about the length of time, no, it's not a joke. Four month wait for two currencies. Four week wait for 100 currencies --> Let's just say America has a more developed financial services sector than Nigeria.
Meanwhile, with the same currency selling for 150 one way and 166 another way, there is arbitrage, or what my brotha Mr. Bismarck-Rewane termed "a round-tripping paradise."
