Emmanuel OchayiThe Nigerian Naira encountered a steep fall, culminating in a close at N1,035.12 per dollar in the official market on January 3, 2024, indicating a 4.72% decline from the previous closure.
The consistent slide of the Naira beyond the N1,000/$ mark for the third time in recent history underscores a worrying pattern of vulnerability, raising alarms among financial experts and market observers.
In a direct speech, a representative from the Manufacturers Association of Nigeria (MAN) expressed concerns: “The forex crisis and high inflation will undoubtedly restrain the performance of our sector until at least mid-2024.”
Despite the Central Bank of Nigeria’s attempts to reinforce the foreign exchange market through interventions, the Naira’s downward trajectory remains, sparking apprehension about its potential repercussions on the wider economy. This unsettling trend could exacerbate existing inflationary pressures, exerting added strain on household budgets, particularly for those reliant on imported goods.
Businesses, both large and small, face foreseeable challenges, potentially grappling with escalated production costs and potential profitability setbacks.
“The sector may experience a meager improvement in manufacturing output as forex and interest rates-related challenges are expected to subside from the third quarter,” stated the MAN representative.
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The association has called upon the government to intervene decisively by revamping the power sector, prioritizing forex and credit allocation to manufacturers, and incentivizing investments in renewable energy to boost electricity generation and enhance energy-cost efficiency.
MAN emphasized the necessity of managing and supervising the number of Bureau De Change operators to curb excesses effectively.
These developments signal a crucial juncture for the Naira, demanding immediate and strategic actions to stabilize its trajectory and alleviate the impending economic strain on businesses and households alike.
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