Nigerian businesses expect the naira to weaken between now and December but it will appreciate next year, according to a survey by the central bank.
The poll of 1,600 firms showed that they expect the naira to “depreciate in the current month, next month and next three months but appreciate in the next six months,” the Abuja-based Central Bank of Nigeria said in a report published on its website. The survey was conducted in the third week of July.
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The local currency has lost about 70% of its value against the dollar since June 2023, when it was allowed to trade more freely in a bid to restore investor confidence in the economy.
Several businesses with dollar obligations, including MTN Group Ltd, the biggest mobile operator in Nigeria, suffered losses as those liabilities ballooned in naira terms due to the currency’ devaluation.
The business expectations survey is a monthly check-up on Nigeria’s leading firms drawn across sectors including manufacturing, construction, energy and services. The central bank reintroduced the report alongside other publications this month as it seeks to broaden public access to economic indicators and foster transparency.
Read also: Nigeria’s economic activities drop for 13th straight month in July, says CBN
Along with the weakening currency, the firms identified insecurity, high interest rate, insufficient power supply, multiple taxes and corruption as the biggest constraints they face operating in Africa’s most populous nation.
“Their perception of inflation indicated that they consider the current inflation rate of 34.19% too high,” the central bank said, in reference to June inflation data. The nation’s annual inflation decelerated for the first time in almost two years to 33.4% in July, data released last week showed.
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