Experts predict further depreciation of Naira against Dollar

Economic experts and financial analysts have predicted a further depreciation of the Naira, while also forecasting that the country’s Gross Domestic Product will grow by almost three per cent in 2022.

According to data, the Naira depreciated by 0.11 per cent or 46 kobo against the American currency, to close the first day of April at N416.63/$1 compared with last weekend’s exchange rate of N416.17/$1.

Naira also put on the same poor performance against the British Pound Sterling dropping in value by 8 kobo.

CBN data shows that Naira closed at N546.54/£1 compared to the previously traded rate of N546.46/£1.

Speaking during Blue Talks Enterprise Banking’s webinar, Regional Head of Equity Research, West Africa, Standard Bank Group, Muyiwa Oni, forecasts that the Naira’s value will drop as the year progresses.

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He said, “We predict that the currency on the official market will be around N440 per dollar from around N416 or N417 that it is. Our view is that as long as we don’t see formal reforms in the foreign exchange market, the shortage we continue to see will persist.”

He observed that due to unfavourable business environments, several investors had resolved to take their money out of the Nigerian economy.

According to him, inflation will average around 15 per cent while the country’s GDP will grow by 2.9 per cent.

He said, “Last year, we saw a GDP growth of 3.4 per cent which is still recovering from the contraction in 2020. Even with this, some people argue that the economy is not still operating at the 2019 level yet, and our view for 2022 is that we will see further economic growth which we estimate at 2.9 percent in GDP.

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Oni noted that the predicted rise in inflation would bring some untold hardship to the country, which includes pervasive insecurity, flooding, electricity tariff increase, currency devaluation, rising energy costs driven by geopolitical tensions, and subsidy removal.

Similarly, the Chief Executive Officer, Stanbic IBTC Bank, Wole Adeniyi, said businesses in Nigeria might face enormous challenges even though they are the main contributors to the country’s economy.

He said, “Enterprises play a significant role in most economies and Nigeria is no exception. These enterprises are essential contributors to job creation and economic development in Nigeria.

“SMEs contribute over 48 per cent in national GDP and account for about 96 per cent of businesses, which in turn create about 84 per cent of employment in 36 States across the country.

“These challenges include limited access to capital financing and adequate public infrastructure.”