Manufacturers in Nigeria have predicted fresh hikes in the prices of commodities in the market to rise in response to the continued fall of the naira against the United States dollar in the forex market.
Africa Today News, New York reports that on Friday, the naira plunged to N1,420/$ at the parallel window of the foreign exchange market.
The President of the Manufacturers Association of Nigeria, Francis Meshioye, on Saturday told reporters that the Naira, which has now remained at over N1,400 in the parallel market for two days, would lead to price hikes in the economy.
He said, “It is not possible to remain profitable with this exchange rate. The first challenge is breaking even. It means the prices of things will be higher, and the income is not there for people to buy things as they should buy as things become more expensive.
“So, the demand will become low, and this will affect our bottom-line. The break-even point will become critical. So, what businesses should do is to ensure that they break even at this time. It is a critical and very challenging time for us.”
Meshioye predicted that these price hikes were unlikely to resonate well with consumers whose spending power has been continuously depleted.
According to him, the frequent fluctuations in the forex market have made it difficult for manufacturers to make long-term plans.
He stated, “It is a harsh time, which means we have to revise our strategy. It is hard for us to have a long-term plan, and even the short-term plans we have to regularly revise them so that we can incorporate the reality of the economy into it.”
The president of MAN added that the current FX reality creates the need for manufacturers to come together and fashion out viable solutions to stay in business.
Read Also: Naira Plunges To Record Low Of ₦1,410/US$ At Parallel Market
The fall of the national currency has been partially responsible for high inflation rates in the country. As of December 2023, inflation rose to 28.92 percent according to the National Bureau of Statistics.
The naira has continued its slide in the parallel market, closing the week at N1,420/$.
Since the Central Bank of Nigeria removed the rate cap on the national currency in June 2023, the naira has fallen to record lows on the official and unofficial foreign exchange windows.
The persistent decline of the naira is following high demand for the dollar in the country, BDC operators noted to PUNCH.
On the official Investor and Exporter window, the naira appreciated by 1.01 per cent to N891.90/$ from the N900.96/$ it closed on Thursday.
In the cryptocurrency peer-to-peer market, the naira was trading for N1,401.7/$ on Binance’s P2P platform as of the time of filing this report. Nigeria has one of the largest peer-to-peer exchange volumes in the world according to Chainalysis, a blockchain firm.