The value of the naira dropped to a record low against the dollar and other foreign currencies, after the Central Bank of Nigeria (CBN)’s decision to stop the sale of dollars directly to Bureau de Change (BDC) operators.
Henceforth, the apex bank plans to deal only with commercial banks who in turn will sell to the public. While the decision has its merits, it has increased to the weakening value of the naira. The official rate of the naira is at N411/$, but on the parallel market it has risen to as high as NN535 after the announcement. On Sunday, the parallel market rate was at N511.
The currency weakness has a significant impact on prices of commodities and also for your money deposited in the bank. Analysts and operators are not sure where the naira will settle or how long it would take to stabilise and get back to growth.
Investing your money in assets denominated in naira may no longer be enough for wealth creation. Nigeria stocks, bonds and treasury bills are yet to recover from the economic realities induced by missteps in fiscal policies, the COVID-19, and the global price of oil and gas.
The stock market’s record negative return year to date (YtD) rose higher at -4.43 percent in July.
Experts say investing in assets denominated by foreign currencies like the dollar may be a surefire way of boosting your wealth. We have highlighted five apps to help you start your journey.
Chaka
Founded in 2019 by Tosin Osibodu, Chaka is a seed-stage company that allows its users to invest in stocks listed on the US stock exchange as well as blue-chip companies in over 40 countries across the world.
Chaka in June 2021 became the first fintech firm to secure a licence from the Securities and Exchange Commission (SEC), which means that your investment is secured by the regulator.
Investors can get started with as little as 1,000 Naira, or $10, to create a local and global wallet to trade. Chaka’s fee structure is 100 Naira (or 3%) for local trades and $4.00 for global trades.
Read also: Naira ends week with 2.18% loss to dollar as market reacts to CBN’s policy
Trove
Founded in 2018, Trove is a mobile app designed to help users invest in stock markets, bonds, exchange-traded funds (ETFs) and other securities directly from their smartphone. There are various stock market options available for users including Nigerian, US, and Chinese equities.
After downloading the app either on the Play Store or iOS and providing all the necessary information, a user requires a minimum of $10 (N3,670 on the current exchange rate) to start investing.
The platform works by partnering with financial services providers such as Verve, Paystack, 213 Capital, Mastercard and Visa to make access to the market seamless.
Users’ personal information is secured with the use of 256-bit encryption. DriveWealth LLC, a self-clearing broker in the US is a regulated member of FINRA/SIPC and holds all the US trading accounts on Trove. It also protects securities holdings of its members of up to $500,000 (including $250,000 for claims for cash).
Risevest
Until November 2019, the mobile investment platform was known as CashEstate. Following its rebrand, Risevest, founded by Eleanya Eke and Bosun Olanrewaju, became a holistic wealth management app with a community that offers financial guidance and long term investing.
On the new Rise, users could become owners of global businesses with as little as N3,670 being the exchange for a $10, within a few minutes of being verified.
Investment options on the Rise mobile app include US real estate, US Stocks, US Venture Capital, and Fixed income. Users can also earn between 13 and 15 percent interest on their annual investments and half of that if they chose the 6 months tenure.
Bamboo
Bamboo investment platform is specifically for buying and selling top stocks, exchange-traded funds (ETFs) and American depository receipts (ADRs) in the United States.
Like Trove and Chaka, foreign investing on Bamboo is facilitated by DriveWealth while local stocks trading is made possible by Lambert Capital, a licensed Nigerian stockbroking firm.
The company is backed by Chrysalis Capital, an investment management firm in Nigeria that focuses on seed and series stage technology startups.
Stablecoins
Stablecoins refers to cryptocurrencies whose value are usually pegged to a range of assets, whether it is a government issued currency like the US dollar, a precious metal like gold or even another cryptocurrency. The most popular stablecoins are pegged to the US dollar. These stablecoins pegged 1-to-1 to the U.S. dollar – such as USDT, USDC, BUSD and GUSD – are backed by reserves whose dollar value is supposed to match the tokens’ circulating supply.
You can invest in Stablecoins by downloading apps such as Binance and Luno.
It is important to do your diligence so you are adequately informed of the requirements, data privacy policies and the charges that you will be exposed to when you begin your journey. You may also require the advise of an investment expert.
