Travelling abroad? Better to save your money in foreign currency

Posted by Felix Okoli on Thursday January 7, 2016 at 10:41:57:

If you intend leaving Nigeria for a foreign country, it's always good to have a foreign currency/Domiciliary account and it can be in any major trusted currency such as the US dollar, British Pounds or Euro. Why is this so? Well, because it would be a better way to store the value of our money than the Naira.

Since the 1980s, the Nigerian Naira has been depreciating against foreign currencies to the extent that it has fallen so low to N250 per US dollar. This is because successive governments in Nigeria have not made any positive impact on changing the economy of Nigeria to become more of an exporting country than an importing one.

Nigeria imports a lot of things it doesn't need to keep importing and that's why foreign currencies will always keep going higher than the Naira and so it won't be a good way to store the value of your money. The only major source of Nigeria's income is crude oil and it's taken from the southern region while the country still goes ahead to still import by-products of crude oil such as petroleum and other products. Nigeria also imports eggs, toothpicks and other unnecessary things she doesn't need to keep importing because of bad policies.

If you are travelling abroad and would probably stay abroad for the long term, it would be a better financial decision to open a domiciliary account if you haven't done so and save some money there. It would also allow you to easily transfer money to Nigeria from the country you are traveling to using a bank wire service. If you saved it in US dollars, chances are that it would not lose value over the long term so that when you eventually get back to Nigeria.

Imagine what would have happened to a Nigerian who opens a savings account in 1996 and saved N1m before travelling abroad to work and in that 1996, the N1m could buy a piece of land in Abuja. He comes back 5 years later and finds that his N1m is still intact and has probably grown to N1.2m but has also lost value because the Naira had depreciated so much that he couldn't buy even half a plot of land. If he saved that money in US dollars and in a domiciliary bank account, it would have even appreciated in value and would still be able to buy that plot of land.

Opening a domiciliary or foreign currency account in Nigeria is quite easy as you can open one with just $200 or less. You can even receive money from abroad directly to that account and can send money to it too when you are in a foreign country.