Nigerian businesses are preparing for continued naira depreciation over the next several months but hold cautious optimism for a potential rebound by May 2025, according to the latest Business Expectations Survey (BES) from the Central Bank of Nigeria (CBN).
This sentiment highlights both immediate economic pressures and longer-term hopes for currency stabilization.
In recent months, Nigerians have grappled with sharp price increases across various goods and services, a trend that business owners say has been driven by factors highlighted in the CBN survey.
Many companies informed Naijaonpoint that price adjustments were inevitable due to the surge in fuel prices and ongoing depreciation of the naira.
Additionally, importers noted that price increases reflect not only current costs but also an anticipation of further exchange rate depreciation, which means that future imports could become even more expensive.
The BES indicates that businesses expect the naira to depreciate through October, November, and into early 2025 due to persistent dollar scarcity, high inflation, and Nigeria’s import dependence.
“Expectations on Exchange Rate (National) Respondent firms expect the naira to depreciate in the current month, next month and next 3 months. However, they expect an appreciation in the next 6 months”. BES report
However, businesses in the BES survey also showed optimism for a brighter exchange rate outlook by mid-2025, with some anticipating a potential naira appreciation around May.
Naijaonpoint Analysts suggest this expectation may be linked to hopes for stronger economic reforms, increased oil revenues, foreign investment, and stabilizing policies from the CBN.
The exchange rate has depreciated by 45% year to date in November as demand pressures continue to impact rates.
This is despite the external reserves climbing above $40 billion amid several apex bank reforms.