Power to purchase: Nigeria’s IJGBs and the Holiday Season

+How to Leverage the IJGB Benefit

In the 2024 holiday season, I Just Got Back (IJGB) individuals can accomplish more with their foreign exchange in Nigeria than ever before, thanks to a combination of Purchasing Power Parity (PPP) for private consumption and the exchange rate. 

The PPP for private consumption increased from ₦94 per international dollar in 2014 to ₦205 in 2023.

Additionally, Nigeria’s exchange rate is at an all-time high, marking the highest level recorded.

This difference means that when a dollar is exchanged, it can buy significantly more in Nigeria than the equivalent amount of Naira would purchase in the United States.

The term “I Just Got Back” (IJGB) refers to people who have been living abroad and have recently returned to Nigeria, a phenomenon that is especially common during the festive season.

PPP for private consumption is an economic theory that uses a “basket of goods” approach to compare currencies across countries. PPP demonstrates how far a unit of currency can go to satisfy domestic versus foreign consumers’ needs, making it a useful measure of a currency’s practical value.

The exchange rate is the value of a nation’s currency in comparison to the currency of another nation or economic zone.

Over the past decade, Nigeria’s PPP has increased from ₦94 per international dollar in 2014 to ₦205 in 2023, representing a 117% rise. 

This ranking implies that Nigerians enjoy relatively strong domestic purchasing power, as fewer Naira are needed to purchase a basket of goods that would cost $1 in the U.S. compared to most other nations.

Nigeria currently places 25th in PPP for private consumption globally, at ₦205.17 to the U.S. dollar.

One U.S. dollar can buy significantly more in Nigeria than in 125 other countries.

In the same vein, within one year, Nigeria’s exchange rate has moved from ₦896 in January to ₦1,670 in October, losing about 86% of its value in 2024.