Price hikes in commodities are expected to ripple through Nigeria
A report by the Punch newspaper shows that the prices of goods in Nigeria are set to jump again. The President of the Manufacturers Association of Nigeria, Francis Meshioye, relayed to the publication that if the Naira does not gain against the dollar, there will be an increase of goods across the market.
“It is not possible to remain profitable with this exchange rate. The first challenge is breaking even. It means the prices of things will be higher, and the income is not there for people to buy things as they should buy as things become more expensive,” Mr.Meshioye stated.
“So, the demand will become low, and this will affect our bottom line. The break-even point will become critical. So, what businesses should do is to ensure that they break even at this time. It is a critical and very challenging time for us,” he added.
Mr. Meshioye also noted that the currency market’s volatility has made it tricky for manufacturers to formulate long-term strategies.
“It is a harsh time, which means we have to revise our strategy. It is hard for us to have a long-term plan, and even the short-term plans we have to regularly revise them so that we can incorporate the reality of the economy into it,” he stated.
The Naira was the worst-performing currency in 2023, in Africa last year, losing around 55% of its value. The steep fall of the Naira was a result of the country’s new administration’s decision led by the president, Bola Tinubu, to float the currency.
In June 2023, the Central Bank of Nigeria (CBN) officially confirmed the removal of the rate cap on the naira at the Investor’s and Exporters’ (I&E) Window of the foreign exchange market.
