A recent report from the Punch newspaper indicates that prices of goods in Nigeria are poised for another surge. According to Francis Meshioye, President of the Manufacturers Association of Nigeria, the potential increase is contingent on the Naira’s performance against the dollar. Meshioye expressed concern about the current exchange rate, stating that remaining profitable is a significant challenge, making it imperative for businesses to break even.
In anticipation of higher prices, Meshioye emphasized the impact on consumer purchasing power, noting that reduced income could lead to lower demand, further affecting businesses’ bottom line. The prevailing volatility in the currency market has added complexity to manufacturers’ long-term planning, compelling them to regularly revise strategies to align with the economic reality.
Highlighting the challenging economic conditions, Meshioye underscored the necessity for businesses to adapt and break even during this critical period. The Naira, having experienced a sharp decline of approximately 55% in value in 2023, emerged as Africa’s worst-performing currency. This decline was attributed to the decision by President Bola Tinubu’s administration to float the currency, officially confirmed by the Central Bank of Nigeria in June 2023.
Furthermore, the National Bureau of Statistics reported a notable increase in Nigeria’s annual inflation rate, rising from 28.20% in November to 28.92% in December 2023. This marked a new high and added to the challenges faced by businesses in the country.