Naira’s 39% Drop Threatens Job Security For Nigerian Workers

 

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The naira, Nigeria’s currency, has significantly weakened against the US dollar in recent months. Specifically, in October 2023 one dollar was equivalent to about 745 naira, compared to over 1035 naira per dollar in January 2024 — a steep depreciation of nearly 39%. The Central Bank of Nigeria (CBN) is expected to take action to address this situation.

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The devaluation poses serious challenges for Nigerian businesses, particularly manufacturers who often need dollars to purchase imports. With fewer naira able to purchase the same amount of dollars, businesses are experiencing heavy losses to their profits.

As a result, many companies are struggling to maintain normal operations. Industry groups like the Manufacturers Association of Nigeria have expressed alarm, warning that without improvements businesses may have to scale back through factory closures or workforce reductions.

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The factors underlying the naira’s decline are complex. Attempts by the CBN to allow more flexibility in the currency exchange rate and secure loans to boost dollar liquidity have so far failed to halt the slide. The naira has continued its depreciation against the dollar despite these measures.

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