Economists and stakeholders in Nigeria’s business community have asserted that Naira instability makes it difficult for businesses to predict costs and revenues accurately, complicating financial planning and budgeting processes.
The naira experienced tumultuous times in the foreign exchange market, culminating in a relatively stable close at N1,485.99/$1 on May 31, 2024, according to data from the FMDQ.
The currency’s performance last month reflects a significant struggle to maintain its value amidst fluctuating forex turnover and investor sentiment.
This volatility impacts everything from pricing strategies to long-term planning, creating a challenging atmosphere for both local enterprises and international investors.
According to the Chief Executive Officer of the Center for the Promotion of Private Enterprise, Dr. Muda Yusuf, the unstable naira creates a lot of uncertainty for businesses.
“If you’re importing anything right now, you’re not sure how much it’s going to cost you to clear it until the goods come based on the prevailing exchange rate.
“So how can you have any plan in such a situation? We have people in the real estate industry who cannot conveniently prepare a bill of quantity because prices keep changing. So that volatility is not good for the economy, and I think it’s something that is increasing the risk of doing business. So it’s not good for investment at all,” he said.