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Naira Plunge: The effect of the Naira losing Value on Entrepreneurs and Business people in Nigeria


Naira Plunge: The effect of the Naira losing Value on Entrepreneurs and Business people in Nigeria.

Nigeria is heavily dependent on imports. As a result, the economy, unfortunately, depends heavily on the value of the Naira in international transactions to peg prices for goods and services. Therefore, if the Naira is valuable, commodity prices are typically stable, while the reverse is the case when the Naira is weakened. In the past week, the Naira saw one of its most significant declines, trading over a thousand Naira to the dollar in the parallel market buoyed by the high demand for foreign exchange and the low supply.

According to the Nigerian Vanguard News, the major factor responsible for this persistent decline in NFI, is the fall in foreign investment inflow into the economy. According to the National Bureau of Statistics, NBS, Capital Importation (Foreign Investment) into Nigeria fell from $23.99 billion in 2019 to $5.33 billion in 2022. This represents a huge 77.8 percent decline in a major dollar supply source in the country.

A Vox Populi on Naira Plunge

In this edition of Digital Pennyvest Vox Populi, we reached out to entrepreneurs and business owners to understand how this has affected their businesses and how they have been able to meander this unique situation. Below are excerpts:

John Brown, JB Consulting, Lagos

The most significant effect has been the increase in the cost of items. I recently tried purchasing some laptops for my business. Between the time of inquiry and payment date (2-3 weeks), the price had increased by 50k for each.

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Vasta Octavian, Octavian Wears, Abuja

It has affected sales. The foreign clothing we import now costs a lot. It has made things hard for both the poor and middle class. Right now, I believe there is no middle class anymore, not with commodities high and the direction the country is heading.

Ezebue Uchenna, CEO of Cinco synergy investment. Agricultural Trading Company, Abuja

With the current fuel hike, the local transportation of products to ports or warehouses has tripled. Operational costs for processing some of the raw materials have increased, affecting prices in the market.

It has affected the livelihood of the Nigerian people. People who had three (3) square meals before are struggling to eat once in today’s economy.

Feyishayo Kale, Online Fitness Instructor, Lagos

As an online fitness instructor who prioritizes healthy eating, and sells online fitness routines, locally and internationally. I have been impacted by the recent Naira plunge in the food market. The naira plunge made it hard to determine the cost of local organic foods in the market, making it hard to maintain a healthy diet for myself and my clients while staying within my budget.

Additionally, the inflation in transportation costs has further added to the financial strain. However, I have found ways to adapt by being more creative with my meal planning for me and my clients and taking advantage of opportunities to walk instead of using transportation. While the economic situation is challenging, I remain committed to maintaining a healthy lifestyle despite these obstacles.

Michael Okonkwo AKA DJ Freemike, Resident DJ at Cubana Abuja, Abuja

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The recent Naira plunge is bizarre. It has affected lots of businesses. For instance, some potential clients have found it challenging to book for my services lately because of my updated price list. Then, clients rarely bargained, but now, the negotiation is high, and I can not risk it by accepting an event that would not be profitable for me and end up losing money. Bookings have reduced as well but I am thankful for the high-end jobs that still come my way.

Comfort Gabriel, Nail Technician, Lagos

As a nail tech/makeup artist, the only way it has affected me is the increase in the price of products we use, and this has made us increase the cost of our services. We are complaining, and our clients are complaining too. What can we do? We have to adjust to the new system because, in Nigeria, nothing goes up and ever comes down.

Joyce Itoro, Online Tutor, Abuja

However, the naira fall impact is not on the high side for me since I earn in a foreign currency. Still, there is a negative part to it. I spend more on purchasing household goods. It’s like the more I earn, the less savings I have because of high goods prices.



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