NACCIMA Raises Alarm Over Naira Depreciation, Fears Implications on Imports and Inflation

By Milcah Tanimu

The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) has voiced apprehension regarding the substantial depreciation of the Naira, highlighting its detrimental effects on the nation.

Dele Kelvin Oye, the association’s National President, expressed concern over the repercussions of the currency’s devaluation on import expenses and inflation rates, emphasizing the imperative for governmental intervention to stabilize the Naira, potentially through pegging and defending its value.

Oye stated, “The significant devaluation of the Naira, currently at N1500/$1 against the dollar, presents numerous challenges for Nigeria. The weakened currency amplifies import costs, influencing prices across various sectors from food to electronics, thereby exacerbating inflation and diminishing the purchasing power of Nigerians, particularly those with fixed incomes.”

He elaborated, “Higher import expenses also inflate production costs for industries reliant on foreign materials, adversely affecting overall business operations. Moreover, government and business face escalated costs in servicing foreign debts, as more Naira is required per dollar, straining financial resources and potentially compromising public service funding. While a devalued Naira may attract foreign investment by lowering asset prices, it could also deter investors seeking stability.”

Furthermore, Oye highlighted the potential benefits of a devalued Naira for non-oil exports like agriculture and manufacturing on the global market, provided that production capacity is efficiently scaled up domestically. However, he underscored the adverse impact of economic uncertainty on consumer spending and confidence, as well as the mixed implications for individuals receiving foreign remittances and bearing expenses for foreign travel and education.

In light of these complexities, the NACCIMA president advocated for governmental intervention to stabilize the Naira, suggesting potential measures such as pegging and defending its value, rather than solely relying on market forces, a strategy adopted by economically robust nations like Qatar and Saudi Arabia.


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