Nigerian businesses expect a decline in the value of the naira from now until December, with hopes for a rebound next year, according to a recent survey conducted by the Central Bank of Nigeria (CBN).
The survey, which included responses from 1,600 firms, revealed that businesses expect the naira to depreciate over the next month and the following three months.
However, they foresee an appreciation within six months, as reported by the CBN on its website. The survey was conducted in the third week of July.
Since June 2023, when the naira was allowed to trade more freely to boost investor confidence, it has lost about 70% of its value against the dollar. This devaluation has severely impacted companies with dollar-denominated obligations, such as MTN Group Ltd., Nigeria’s largest mobile operator, which faced significant losses as their liabilities increased in naira terms.
The business expectations survey, which is conducted monthly, gathers insights from leading firms across various sectors, including manufacturing, construction, energy, and services.
The central bank recently resumed publishing this report, along with other economic indicators, to enhance public access to crucial data and promote transparency.
In addition to currency depreciation, the surveyed firms identified key challenges in operating within Africa’s most populous nation. These include insecurity, high-interest rates, inadequate power supply, multiple taxation, and corruption.
The CBN also noted that businesses view the current inflation rate of 34.19% as excessively high, referencing June’s inflation data.
“Their perception of inflation indicated that they consider the current inflation rate of 34.19% too high,” the central bank said, in reference to June inflation data.
Last week, new data revealed that the nation’s annual inflation rate had slowed to 33.4% in July, marking the first deceleration in nearly two years.
Discover more from Pluboard
Subscribe to get the latest posts sent to your email.