Many Nigerians have been greatly concerned with the problem of Nigeria economy especially the persistent depreciation of the naira exchange rate. Some have tri4ed to summarize them and Infact, some impact have been made through their work I identifying the major difficulties confronting the smooth running of the economy and naira exchange in particular.

It was in the light of these difficulties that the federal government launched the structural adjustment programme.. (SAP) on 27^th July 1986. and among the component of SAP was second tier foreign exchange market (SFEM).

This project is therefore designed to provide an in-depth of the cause of the persistent depreciation of the naira and appropriate possible measures for modalities. Frankly speaking, this topic cannot be effectively treated in perfect isolation of the foreign exchange market (FEM). Therefore, the beginning chapters of this project will deal mainly with the introduction, difficulties and benefits as it pertain to naira exchange rate and the subsequent chapters will attempt to summarize and provide possible measure which will enhance the improvement of naira.

Moreover, it should be appreciated that writing about fast changing and growing scene is a very difficult and hazardous affairs. This project is not exception since most data was collected for observation made from the day to day sessions of the market which continue to change with time but in any case it provided enough trends for forecast.

We are greatly assisted by articles of the magazines; however, some of the primary data are collected directly from Central bank official, Benin and Enugu state through personal interview.

TABLE OF CONTENT

Title page

Approval page

Dedication

Acknowledgement

Abstract

Table of content

CHAPTER ONE

Introduction

1.1 Background of the study

1.2 Statement of the problem

1.3 Purpose and objective of the study

1.4 Significance of the study

1.5 Limitation of the study

CHAPTER TWO

Review of related literature

CHAPTER THREE

Research design and methodology

3.1 Sources of data (secondary source only)

3.2 Location of data

3.3 Method of data collection (literature works only)

CHAPTER FOUR

Findings

CHAPTER FIVE

Recommendation and conclusion

Reference

CHAPTER ONE

INTRODUCTION

During the pre – Babangida administration years, the Nigerian currency was above the dollar and at par with the pound, but now, the naira seems to be tumbling down the abyss. Exchanging for #44 to the United States dollar and #120 to the pound sterling in the parallel market as at October 1994 and despite the official rate for the pound sterling at 336 to one dollar and #68 to one pound in the official market. The question is how did we get to this present stage? What happened between 1995 and now?

When General Ibrahim Babangida mounted the seat, naira was overvalued, especially as receipts from crude – oil – Nigerian main foreign exchange earner had been decline over the years. So some thing was to be done about the naira. Government manufacturers and other commentators came into a consensus that the naira exchange rate should be more realistic.

On the other hand, advocates of devaluation had a relief on 26^th September, 1986 when government introduced the second tier foreign exchange market (SFEM) in line with the objective of SAP. As explained by victor odozi, the CBN director of foreign currency operations “the move was to enable education I the pressure on balance of payment”.

.1 BACKGROUND OF THE STUDY

Naira has lost its value? Cried a house wife who went to the market with some boundless of naira and came home with few items in her basket and had no balance from the money she went to market with.

Today, nobody wants to use naira as medium of exchange, no body wants to counts his wealth in naira.

Some ministers in the federal capital territory receive their salaries I dollars. In same vein, many Nigerian, if given the opportunity wouldn’t want to be paid with naira yet there is this obligation to every Nigerian to serve and love his father’s land. Even some of the so – called fathers have no respect for the land. Now the fact is that their children will come up tomorrow and would want to be paid with dollar. Naira, which is their father’s land currency keep going down.