Cardoso highlights potential benefits of naira’s sharp depreciation
Central Bank of Nigeria (CBN) Governor Yemi Cardoso highlighted the potential benefits of the naira’s sharp depreciation, framing it as a unique opportunity for Nigeria to enhance its export competitiveness.
Despite the challenging economic environment, Cardoso urged investors to capitalize on the weakened naira to boost the nation’s exports, which could lead to increased foreign exchange earnings.
With the naira losing over 170 per cent of its value in the past year—currently trading between 1,685/$ and 1,700/$—Nigeria has seen a significant trade surplus, amounting to N6.95 trillion in the second quarter of 2024.
Cardoso explained that the devaluation, while problematic for imports, has made Nigerian goods more competitive globally, offering a strategic advantage to local exporters.
“The drop in the value of the naira might seem like a threat, but it presents an opportunity to boost exports,” Cardoso noted. “As the cost of imports rises and foreign products become more expensive, this opens doors for Nigerian businesses to thrive in international markets. The demand for our goods will rise due to their relative affordability.”
Analysts agree with Cardoso’s assessment, emphasizing the potential for export growth. “The naira’s devaluation has turned Nigeria’s export sector into a fertile ground for economic expansion,” said economist Samuel Oluwafemi.
“This is an opportunity for businesses to scale production for foreign markets, and the country’s trade surplus reflects this growing momentum.”
Financial institutions, including the World Bank, have supported the CBN’s policies aimed at stabilizing the economy and fostering export-led growth.
Cardoso reiterated that the bank’s strategies are on the right track, citing positive feedback from global rating agencies and international financial institutions.
“This shift could be pivotal for Nigeria’s economy. A sustained export boom will not only provide more foreign exchange but could also contribute to stabilizing the naira over time. However, the challenge remains in ensuring that this momentum translates into long-term growth,” analyst Ifeoma Onwughalu added,
Cardoso’s optimistic view on export growth comes at a time when Nigeria is grappling with inflation and a growing cost of living crisis, but the CBN Governor remains steadfast in his belief that the current policies will yield significant benefits for the country’s economic transformation.
