Nigerian businesses are preparing for further naira depreciation over the coming months, with cautious optimism for a potential recovery by May 2025, as outlined in the Central Bank of Nigeria’s (CBN) latest Business Expectations Survey (BES). This survey provides a snapshot of both immediate economic pressures and the long-term aspirations for currency stability among businesses.
Amidst rising costs, driven in part by a depreciating naira and escalating fuel prices, businesses are facing tough choices. Many have had to implement price hikes to sustain operations, with importers particularly impacted by exchange rate shifts. Importers shared concerns with Nairametrics, noting that higher prices reflect both current costs and anticipated increases due to persistent naira pressures.
The BES report outlines a prevailing sentiment that the naira will continue to weaken into early 2025, with primary drivers including dollar scarcity, high inflation, and Nigeria’s import dependency. “Respondent firms expect the naira to depreciate in the current month, next month, and over the next three months,” the BES report states. 
Despite this outlook, there is a glimmer of hope among businesses, particularly those in import-heavy sectors, for a potential turnaround by May 2025.
Many analysts believe that expectations for a mid-2025 recovery stem from hopes for bolstered economic reforms, increased oil revenues, and heightened foreign investment. Additionally, the CBN’s ongoing policies, which aim to ease foreign exchange access and encourage non-oil exports, may help stabilize the naira in the long term.
For now, Nigerian consumers are likely to continue feeling the pinch as businesses pass on increased costs. The depreciation of the naira has accelerated inflation, cutting further into purchasing power and making day-to-day expenses increasingly burdensome. Year-to-date, the naira has lost 45% of its value in November, despite external reserves exceeding $40 billion as the CBN implements various reforms.
Will Nigeria’s economy see the rebound businesses are hoping for by mid-2025?
