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On Tuesday, the naira experienced a further decline, exchanging for the dollar at rates ranging between 1,005/$ and 1,025/$ in the parallel market.
Various stakeholders, including owners of small-scale enterprises, the Nigeria Employers’ Consultative Association (NECA), and manufacturers, voiced apprehension about the depreciating value of the naira. They cautioned that this trend could force factory closures and result in job losses.
The naira has consistently decreased in value since the Central Bank of Nigeria adopted a free float approach for the national currency against major currencies, beginning in June.
This decline has severely affected manufacturers’ ability to procure raw materials, leading to a situation where more companies are contemplating layoffs or closure.
Due to the diminishing value of the naira, manufacturers are faced with the necessity to reduce production, jobs, and imports of raw materials.
Naira Hits 1,025/$
Bureau de Change operators shared that the naira was exchanged for the dollar at rates ranging between 1,005/$ and 1,025/$ on Tuesday.
Yusuf Kareem, a BDC operator in Lagos, reported, “We bought at N1,005/$ and sold at 1,025/$ on Tuesday. Money remains scarce, and the value of the naira continues to fall.”
Musa Yunus, another BDC operator in Lagos, mentioned, “The naira was trading at 980/$ two weeks ago, but now it’s 1,020/$. We are uncertain about the future trends.”
Several BDC operators emphasized the scarcity of dollars, with rates of acquisition and sale reflecting the challenging situation.
Babangida, another Lagos-based BDC, noted, “I sell at N1,010 per $ and buy at the rate of N1,000.”
He added, “This situation will escalate imported inflation as prices of imported goods increase, simultaneously boosting export income in naira for exporters.
Adewale Oyerinde, Director-General of Nigeria Employers’ Consultative Association, emphasized the need for the government to address the forex challenges, asserting that the forex situation is a significant impediment to acquiring crucial inputs and disrupts financial projections.
Expressing concern, Dr. Ikenna Nwaosu from the Nigeria Economic Summit Group, warned that many companies might face closure due to these circumstances. He highlighted the potential ripple effects on various sectors, including the educational sector and petroleum pricing.
Chieftain Pius Ujubuonu from the Association of Nigerian Licensed Customs Agents described the adverse impact on the freight forwarding sector and urged for a solution to prevent a potential halt in imports.
The House of Representatives directed the Committee on Banking Regulation to investigate the use of foreign currencies, especially the dollar, for domestic transactions in Nigeria. They also urged the CBN to stabilize the currency, combat speculative activities in the forex market, and increase the naira withdrawal limit to alleviate pressure on foreign currencies.
Additionally, they urged the Federal Government to implement policies promoting economic diversification, reduce corruption, enhance foreign investors’ confidence, and engage with the CBN to ensure compliance strategies are initiated.