Naira Continues to Weaken against Dollar, Official Window N1,520.40/$1, Parallel Market N1,535/$1

•NACCIMA decries depreciation, expresses concern over impact on imports

Nume Ekeghe and Dike Onwuamaeze

The Naira yesterday continued to decline at both the official window and the parallel market, closing at N1,520.40/$1, a N42.29 loss when compared to N1,478.11/$1 which it closed on Monday at the Nigerian Autonomous Foreign Exchange (NAFEM) window.

At the end of trading, the parallel market concluded at N1,535/$1, a loss of N50 compared to N1,484/$1, which it also exchanged a day earlier.

Also, the daily turnover recorded a decline in transactions of 40.85 per cent, to $128.76 million compared to the $217.64 million recorded on Monday.

Furthermore, the highest spot rate observed stood at N1,568, with the lowest spot rate recorded at N1,350.

Meanwhile, the National President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dele Oye, has expressed concern over the significant depreciation of the naira, noting that it poses multiple challenges for the country.

Oye, in a statement, expressed worry over the impact of the currency depreciation on import costs and inflation, reiterating the need for the government to stabilise the Naira by potentially pegging and defending it.

He said: “The significant depreciation of the Naira, now at N1500 to the dollar, poses multiple challenges for Nigeria. The weakening currency increases import costs, affecting prices of everything from food to electronics, thereby fuelling inflation and reducing the purchasing power of Nigerians, especially those on fixed incomes.

“Higher import costs also escalate production expenses in sectors reliant on foreign materials, impacting overall business operations.

“Government and business foreign debt servicing costs rise as more Naira is needed per dollar, straining financial resources and potentially reducing public service funding. While a weaker Naira might attract foreign investment by making assets cheaper, it could also deter investors seeking stability.”

However, on a positive note, he stressed that a devalued Naira enhances the competitiveness of non-oil exports like agriculture and manufacturing on the global market.

But he added that this benefit is contingent on the country’s ability to efficiently increase production.

“Domestically, the economic uncertainty discourages consumer spending and confidence. For households receiving foreign remittances, the value of received funds increases, offering some relief. Conversely, expenses for foreign travel and education escalate, impacting affordability,” he added.

The NACCIMA President advised that given these complexities, it was crucial for the government to stabilise the Naira by potentially pegging and defending it, rather than leaving it to market forces, a strategy even economically stronger nations like Qatar and Saudi Arabia employ.

Also, Oye, has reaffirmed the association’s commitment to fostering sustainable economic ties with China and addressing the challenges faced by Nigerian exporters in the Chinese market.

He reaffirmed this when NACCIMA hosted a delegation from Hunan Province, China, at the Abuja Chamber of Commerce and Industry (ACCI) office, as part of its renewed efforts to strengthen the bilateral trade relationship between Nigeria and China.

Oye, who was represented by the ACCI President, Mr. Emeka Obegolu, highlighted the need to expand the range of Nigerian agro commodities included on China’s protocol list, and expressed concerns regarding the issuance and acceptance of letters of credit between Nigerian and Chinese banks.

He also underscored the importance of the current discussions as a pathway to increased trade opportunities and highlighted the need for dialogue to resolve the issues surrounding financial instruments critical to international trade.

The NACCIMA president added that the association was poised to work closely with the Hunan delegation and other relevant stakeholders to pave the way for a more inclusive trade agreement that would offer benefits to Nigerian exporters and Chinese importers and support the establishment of a Nigerian business presence in Hunan.

He said: “NACCIMA remains dedicated to enhancing its role as a pivotal force in the advancement of commerce and industry, not only within the Nigerian economy but also in its international engagements, particularly with China.”

The 22-member Chinese delegation, which was led by the Director General of the Department of Commerce of Hunan Province, Mr. Shen Yumou, also included government officials, business leaders, and representatives from the Bank of China.

They were joined by the NACCIMA Coordinator in China and Chairman of Zeenab Foods Limited, Dr. Victor Ayemere.

Yumou, acknowledged the strength of the bilateral relationship and expressed his willingness to enhance cooperation as part of the broader China-Africa Initiative.

He also announced the upcoming China-Africa Economic Trade Expo to be hosted in Nigeria in November 2024 and promised further collaboration details to NACCIMA.

The meeting concluded with a commitment to ongoing dialogue and collaboration, and a group photo that symbolised the shared vision of prosperity and strong economic ties between Nigeria and Hunan Province.