Despite a nearly 70% depreciation of the naira since the beginning of the year, Nigerian businesses still expect the currency to weaken further before a turnaround, according to a Central Bank of Nigeria (CBN) survey. The CBN’s Business Expectation Survey, which polled over 1,600 Nigerian enterprises, found respondents anticipated the naira to depreciate in July and August, as well as the following three months.

However, respondents predicted the struggling currency to begin appreciating some time in late December or early 2025, with this trend expected to continue for six months. Since the CBN conducted the survey (between July 15 and 19), the naira has continued to lose ground against the U.S. dollar.

This has occurred despite the CBN’s injection of millions of dollars into the foreign exchange market. As reported by Bitcoin.com News, the central bank’s attempt to curb the naira’s slide by selling U.S. dollars at discounted rates failed to prevent the naira from hitting an all-time low of NGN1,640 per dollar in July.

Meanwhile, the naira’s continued depreciation has fueled Nigeria’s inflation rate, which reached 34.19% in June. The high inflation rate and the resulting decline in living standards sparked protests by ordinary Nigerians, resulting in the reported deaths of 17 people. A majority of survey respondents, including a large number of large firms, perceived the June inflation rate as very high.

Although a majority of respondents were less optimistic about the naira’s immediate prospects, the survey found that many maintained an overall positive business outlook.

“The positive outlook in the volume of business activities of the firms in the next month
implied improved prospects for employment in the same period. The sector with the
highest prospect for employment is the agriculture sector, followed by the industry and
services sectors,” the survey report stated.

Still, many of the respondents cited Nigeria’s insecurity as the primary factor hindering business activity in July 2024. They also listed high interest rates, insufficient power supply, and high or multiple taxes as other major constraints.

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