The unprecedented depreciation of the national currency, the naira, against the dollar and other major international currencies is causing widespread distress.
This is true particularly for individuals planning international travels and financing the education of their children and wards abroad.
The parents are grappling with the impact of the naira fall as expenses surge, leading to a sharp increase in the cost of funding their children’s education abroad due to unfavourable exchange rates.
Trading on the last working day of 2023 began at N911.67/$, it rose to a high of N1,224.10/$ and fell to N700/$, before closing at N907.11/$. Forex turnover improved marginally to $89.30m, a 6.78 per cent increase from the $83.63m it was the previous day.
At the parallel market, the naira closed the year at N1,195/$. A Bureau de Change operator said, “The dollar is N1,195. The difference between the buying and selling rates today is about N6/N7.”
Recently, the World Bank noted, “However, there is also a need to increase FX supply in the market. Facilitating FX flows, especially from all exports, through the NAFEM can help provide additional volumes in the official window that can help provide stability. In addition, clarity on the CBN’s net reserve position, and on the CBN’s continued progress in clearing the FX backlog, would also strengthen market confidence.”
Manufacturers have lamented that the naira depreciation has led to an increase in operating costs for industrialists whose major costs, including finance costs, are denominated in foreign currencies.
For instance, six consumer goods companies listed on the Nigerian Exchange Limited posted a total net loss of N179.561bn in the first half of 2023 due to foreign exchange crises.
The Chairman, Nigerian Economic Summit Group, Mr Niyi Yusuf, identified some major consequences of the declining naira value.
“This will lead to increasing imported inflation as prices of imported items will increase, while also increasing export income in naira for those who export goods and services,” he stated.
