Emmanuel OchayiThe Nigerian Naira experienced a shocking decline in value within two days, dropping from N1,500 to N1,780 per dollar on the black market. This depreciation comes as Nigerians prepare for the festive season, raising concerns about the impact on the prices of essential goods and services.
The sudden fall has sparked debates among market analysts and everyday Nigerians. For many, the festive season, which is usually marked by celebrations, shopping, and travel, now seems uncertain due to the fear of skyrocketing prices for food, clothing, and transportation.
Join our WhatsApp ChannelSeveral factors have contributed to the recent rise in the value of the naira. Nigeria’s recent $2.2 billion Eurobond inflow, the launch of the Central Bank of Nigeria’s Electronic Foreign Exchange Matching System (EFEMS), and increased inflows of dollars from returnees and crypto investors were expected to strengthen the naira. But despite these positive developments, the currency’s sharp fall has left many Nigerians anxious.
Nigerians Voice Their Fears on the Naira’s Decline
Many Nigerians have expressed concerns about the impact of the naira’s depreciation on their daily lives. At a busy Lagos market, traders and shoppers shared their frustrations.
“I was very happy 2 days ago when the naira started appreciating because the stronger the naira, the cheaper the prices of goods in the market. But I’m afraid that food prices will go up again after the sudden rise,” said Nneka Obiora, a mother of three. “Last week, a bag of rice was already expensive, and now I’m sure it will increase more because of this naira issue. How will we survive this Christmas?” she asked, her face showing clear worry.
Dickson Daniel, an Uber driver in Lagos, lamented how the fuel costs might rise also due to the continuous weakened naira. “If the naira continues like this, fuel prices will increase again. That means transport fares will go up too. My customers will complain, but what can I do?” he said, visibly frustrated.
Chidinma Eze, a small business owner who imports fabrics from Turkey, fears the increased cost of imports will cut into her profits. “I buy my fabrics in dollars. With this naira rate, I’ll have to increase my prices, but I’m not sure if my customers will buy at higher prices,” she said, shaking her head.
Amaka Nwosu, a civil servant, voiced her concern about the impact on education costs also on this festive periods. “The prices of food stuffs have been going up for sometime, but with this naira situation i fear we will not celebrate Chritmas and New year well this time. The government must intervene. This was not what we signed in for.”
READ ALSO: Naira Reverses Gains, Falls To N1,780/$ In Black Market
Adebayo John, a youth corps member in Lagos, highlighted the general frustration among young people. “We thought the naira was getting better when it went to N1,500. Now it’s N1,780. How are we supposed to plan for this festive period and even our future with this instability?” he asked, looking visibly upset.
Experts Explain the Naira’s Fluctuations
While ordinary Nigerians express their fears, financial experts have provided insights into the reasons behind the naira’s dramatic fall.
According to Dr. Tunde Olaniyi, an economist, the initial appreciation of the naira was temporary. “The recent rise to N1,500 was largely influenced by the Eurobond inflow and the introduction of EFEMS,” he said. “However, once the market adjusted, supply began to tighten, and demand increased, causing the naira to fall again.”
He explained that the market’s response to the new forex matching system played a role in the currency’s performance. “EFEMS is supposed to improve transparency, but it’s still early days. Banks and big players are still testing the system. This adjustment period may have caused the market to overreact,” Dr. Olaniyi stated.
Another financial analyst, Mr. David Ibekwe, attributed the depreciation to speculative activities. “Many people started hoarding dollars again. Once they saw the naira appreciating, they feared it might reverse. This fear caused panic buying, pushing the naira back down,” he said.
He added that the return of Nigerians living abroad, known as “I Just Got Back” (IJGB) citizens, usually brings in more dollars during the festive season. “Yes, the IJGBs bring in dollars, but it’s not enough to stabilize the market when there is panic buying. People need confidence in the system, and that takes time,” Mr. Ibekwe explained.
Implications for the Festive Season
With the naira now trading at N1,780 per dollar, Nigerians are bracing for higher prices during the festive season. The cost of imported goods, such as rice, frozen foods, electronics, and clothing, is expected to rise.
Traders at Lagos’ Balogun Market are already adjusting their prices. One shop owner, who declined to be named, said, “We have no choice but to increase prices. Every time we go to restock, our suppliers say the price has changed because of the dollar.”
The transport sector is also expected to feel the heat. Fuel importers, who rely on dollars for imports, may pass on the cost to consumers, leading to higher fares. “If petrol becomes more expensive, I will have to increase my fare,” said Musa, the taxi driver. “It’s not fair to us or our customers, but that’s Nigeria for you.”
What Lies Ahead for the Naira?
While experts remain hopeful that the EFEMS system will bring more stability to the naira in the long run, the short-term outlook remains uncertain. Market sentiment and speculation continue to drive the black market rates.
Dr. Olaniyi advised the Central Bank of Nigeria (CBN) to improve communication with market stakeholders. “If the CBN provides regular updates on the impact of EFEMS, it will reduce speculation. Transparency builds trust, and trust stabilizes the market,” he noted.
Meanwhile, Nigerians are left to navigate the financial uncertainty. As the festive season approaches, many are worried about how much more their naira will buy in the coming weeks. For mothers like Nneka Obiora, the concern is simple: “I just want to be a
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
