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Businesses eye potential naira rebound by May 2025 amid short-term depreciation crisis –CBN survey - THE SUN
Amid mounting economic pressures, Nigerian businesses are preparing for further naira depreciation in the coming months, but many are cautiously hopeful for a rebound by May 2025, as highlighted in the latest Business Expectations Survey (BES) from the Central Bank of Nigeria (CBN).
In recent months, Nigerians have felt the sting of rising prices for essential goods and services, as business owners contend with elevated fuel costs and a depreciating naira. For companies dependent on imports, price hikes have been unavoidable, driven by the combination of increased foreign exchange costs and expectations of additional depreciation. Importers, especially those relying on dollar-denominated goods, warn that future imports may become even pricier, intensifying pressures on operational costs and ultimately impacting consumers.
The CBN’s BES report reveals that firms expect the naira to weaken through the end of 2024 and into early 2025, citing ongoing dollar shortages, high inflation, and Nigeria’s heavy reliance on imported goods. Businesses, particularly in manufacturing and import-dependent sectors, anticipate rising expenses for raw materials, which may lead to higher consumer prices as they adapt to the challenging currency environment.
However, despite these near-term concerns, many businesses are optimistic that the naira could appreciate by mid-2025. Analysts suggest that this optimism is likely fueled by expectations of economic reforms, increased oil revenue, enhanced foreign investment, and supportive policies from the CBN.
Efforts such as prioritising foreign exchange access for key sectors and encouraging non-oil exports are seen as steps toward a more stable exchange rate.
For now, businesses are navigating rising operational costs, and consumers are feeling the strain of inflation, with purchasing power further eroded by sustained price increases. Yet, the anticipation of a more favorable currency environment by mid-2025 provides a glimmer of hope for businesses and consumers alike, as Nigeria’s economic resilience faces a crucial test in the months ahead.
