A recent Central Bank of Nigeria survey found that Nigerian businesses expect the naira to weaken further before appreciating in late 2024 or early 2025. This pessimism comes despite the CBN injecting millions of dollars into the foreign exchange market. The depreciation of the naira has fueled inflation, sparking protests. While most businesses are pessimistic about the naira’s near-term future, they maintain a generally positive outlook.

Nigerian businesses predict Naira will appreciate by 2025

Despite the naira losing nearly 70% of its value since the start of the year, Nigerian businesses still expect the currency to weaken further before reversing course, according to a survey by the Central Bank of Nigeria (CBN). The CBN’s Business Expectations Survey, which polled more than 1,600 Nigerian businesses, found that respondents expected the naira to depreciate in July and August, as well as the next three months.

However, respondents predicted that the struggling currency would begin to appreciate sometime in late December or early 2025, with this trend expected to continue for six months. Since the CBN conducted the survey (July 15-19), the naira has continued to depreciate against the US dollar.

This happened despite the CBN pumping millions of dollars into the foreign exchange market. As Bitcoin.com News reported, the central bank’s efforts to curb the naira’s slide by selling US dollars at a discount failed to prevent the naira from hitting a record low of 1,640 NGN/dollar in July.

Meanwhile, the continued depreciation of the naira has fueled Nigeria’s inflation rate, which hit 34.19 percent in June. The high inflation rate and falling living standards have sparked protests by ordinary Nigerians, resulting in the reported deaths of 17 people. The majority of survey respondents, including a large number of large companies, considered the June inflation rate to be very high.

Survey respondents maintain positive business outlook

Although the majority of respondents were not optimistic about the naira's immediate prospects, the survey found that many still maintained a generally positive business outlook.

“Positive outlook for corporate business activity volume next month
implies improved employment prospects over the same period. The industry has
The highest employment prospects are in agriculture, followed by industry and
services,” the survey report stated.

However, many respondents still cited the unstable situation in Nigeria as the main factor hindering business operations in July 2024. They also listed high interest rates, inadequate electricity supply, and high or multiple taxes as other major constraints.

What do you think about Nigeria's survey results? Share your thoughts in the comments section below.
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