ADVERTISEMENT
TechEconomy
Saturday, June 7, 2025
No Result
View All Result
Advertisement
ADVERTISEMENT
  • News
  • Tech
    • DisruptiveTECH
    • ConsumerTech
      • Accessories
      • Phones
      • Laptop
      • Gadgets and Appliances
      • Apps
    • How To
    • TechTAINMENT
  • Business
    • Telecoms
      • Broadband
    • Mobility
    • Environment
    • Travel
    • Commerce
    • StartUPs
    • TE Insights
    • Security
  • Partners
  • Economy
    • Finance
    • Fintech
    • Digital Assets
    • Personal Finance
    • Insurance
  • Features
    • IndustryINFLUENCERS
    • Guest Writer
    • Appointment
    • EventDIARY
    • Editorial
  • Apply
  • TecheconomyTV
  • Techeconomy Events
  • BusinesSENSE For SMEs
  • TBS
  • News
  • Tech
    • DisruptiveTECH
    • ConsumerTech
      • Accessories
      • Phones
      • Laptop
      • Gadgets and Appliances
      • Apps
    • How To
    • TechTAINMENT
  • Business
    • Telecoms
      • Broadband
    • Mobility
    • Environment
    • Travel
    • Commerce
    • StartUPs
    • TE Insights
    • Security
  • Partners
  • Economy
    • Finance
    • Fintech
    • Digital Assets
    • Personal Finance
    • Insurance
  • Features
    • IndustryINFLUENCERS
    • Guest Writer
    • Appointment
    • EventDIARY
    • Editorial
  • Apply
  • TecheconomyTV
  • Techeconomy Events
  • BusinesSENSE For SMEs
  • TBS
No Result
View All Result
Tech | Business | Economy
No Result
View All Result
Podcast

Home » Why the CBN’s Naira Devaluation Claim is Appreciated

Why the CBN’s Naira Devaluation Claim is Appreciated

Joel Nwankwo by Joel Nwankwo
June 1, 2023
in Finance
0
Naira devaluation

RelatedPosts

Nigeria and USD, Nigerian Banking System - Naira Appreciate

Naira Continues to Appreciate in Official Market, Closes at N1,553/$1

June 6, 2025

Naira Strengthens Further in Official Market, Closes at N1,565/$1

June 5, 2025
UBA
Advertisements

Bola Ahmed Tinubu, Nigeria’s recently elected president, pledged to strengthen the country’s economy through an industrial policy that will make use of all available fiscal tools to encourage indigenous manufacturing and reduce reliance on imports.

Three days later, news that the CBN had devalued the naira’s exchange rate to 630 to one dollar caught the Central Bank of Nigeria’s (CBN) attention. Dr. Isa AbdulMumin, the acting director of corporate communication, immediately stated that the rumors were untrue and that the CBN had not depreciated the naira.

For the avoidance of doubt, the exchange rate in the Investors’ & Exporters’ (I&E) window traded this morning (June 1, 2023) at N465/US$1, and it has been consistent at this rate for a time.

Despite the CBN’s denial of the naira devaluation, it is important to highlight that this may not be the best strategy for Nigeria’s efforts to reduce imports.

The CBN might theoretically reduce the value of the local currency to limit imports at the expense of slower economic expansion. However, later procedures carried out in the past did not resolve this problem. It forced the economy to pay more for commodities.

Imported items are more expensive as a result of the naira’s depreciation. This may ideally discourage imports into the nation. Nigeria’s current account deficit will only grow if the naira weakens because of its high reliance on imports and its unpopular export sales policy.

Why Naira Devaluation is Not Ideal

Naira devaluation will cause inflation in the country by raising import costs while maintaining the same level of domestic demand. The CBN would have operated irrationally if it devalued the naira while claiming to be fighting inflation when it raised interest rates.

Looking inward in order to boost the growth of the manufacturing industry means that devaluing the currency will encourage local manufacturers to increase their production capacity since locally-made goods will become cheaper than imported products. However, the CBN promotes imports and inhibits domestic production by raising the interest rate.

A consumer nation like Nigeria shouldn’t devalue its money because doing so would result in inflation and cause its people to become poorer. The CBN is getting this one right by not devaluing the Naira.

Manufacturing Rather than Devaluation

Technical or actual Naira depreciation is not something I oppose. However, given the current economic situation, devaluation is not the best course of action at this time. Devaluation will make it more difficult to lower interest rates by driving up import costs and supporting growing inflation.

If our economy is one that exports, then it will attract investment. If Nigerians can easily locate made-in-Nigeria goods, the country may quickly make progress toward the creation of local content and a strong, advanced economy.

Nigerian businesses operate in a challenging economic climate. This is highlighted by the fact that machines and raw materials are not manufactured in the nation; the scarcity of finances and high cost of them; the high rate of inflation; the numerous taxes and regulations; the inadequate power supply and bad roads; the effect of limited and inadequate port facilities and high charges; and unfavorable monetary and tariff policies, among many others.

As a result, manufacturing made-in-Nigeria goods becomes challenging, which opens the door for imports. The government needs to prioritize manufacturing over the devaluation of the currency.

For this, it can set up development funding windows with flexible conditions for small and medium-sized businesses, establish a platform for monitoring and evaluating progress with input from the private sector to oversee the distribution of various development funds for the industries, offer a credit guarantee for commercial bank loans to businesses, and encourage sizable investment in the entire electricity value chain, including generation, transmission, and distribution.

Loading

Advertisements
MTN ADS

Author

  • Joel Nwankwo
    Joel Nwankwo

    Joel Nwankwo is a tech journalist. He is passionate about telling stories as it relates to Africa's social and financial tech advancements. You can reach him at joel.nwankwo@techeconomy.ng

    View all posts
0Shares
Previous Post

Make Your Workspace POP with Logitech’s Vibrant Mouse

Next Post

Nigeria Needs More Investment in Infrastructure to Support ePayment Systems – David Isiavwe

Joel Nwankwo

Joel Nwankwo

Joel Nwankwo is a tech journalist. He is passionate about telling stories as it relates to Africa's social and financial tech advancements. You can reach him at joel.nwankwo@techeconomy.ng

Related Posts

Nigeria and USD, Nigerian Banking System - Naira Appreciate
Finance

Naira Continues to Appreciate in Official Market, Closes at N1,553/$1

by Latifat Fashina
June 6, 2025
0

The naira strengthened further in the official market on Thursday and closed at N1,553/$1, a 0.77% appreciation from the previous...

Read more
Hot money in Nigeria - Naira | official market

Naira Strengthens Further in Official Market, Closes at N1,565/$1

June 5, 2025
Naira vs Dollar | Asset management

Naira Appreciates to N1,579/$1 as Market Confidence Grows

June 4, 2025
Tony Elumelu, chairman of UBA

Tony Elumelu Buys N43.9bn Worth of UBA Shares to Boost Stake

June 3, 2025
NairaWatch, Naira and dollar

Naira Appreciates, Closes at N1,582/$1 in Official Market

June 3, 2025
Agentforce for financial services by Salesforce

Salesforce Introduces Agentforce for Financial Services to Address Shrinking Workforces

June 2, 2025
Next Post
ePayment in Nigeria by Dr David Isiavwe

Nigeria Needs More Investment in Infrastructure to Support ePayment Systems – David Isiavwe

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Techeconomy Podcast

Techeconomy Podcast
Techeconomy Podcast

Infowave is brought to you by TechEconomy. Every week we will bring new stories from startups and influencers who are shaping and changing the world we live in. We’ll also bring you reports on topics you should know.

Follow us @techeconomyng for more.

TECH TALK EPISODE 2
byTecheconomy

PRODUCTIVITY AND WORK-Life Balance

TECH TALK EPISODE 2
TECH TALK EPISODE 2
May 22, 2025
Techeconomy
CYBERSECURITY ESSENTIALS
April 24, 2025
Techeconomy
Digital Marketing Trends and strategies for 2025 and beyond
February 27, 2025
Techeconomy
Major Lesson for Techies in 2024 and Projections for 2025
December 6, 2024
Techeconomy
Major Lessons for Techies in an AI-Driven World | Techeconomy Business Series Highlights
November 26, 2024
Techeconomy
Maximizing Profitability Through Seasonal Sales: Strategies For Success
November 8, 2024
Techeconomy
Techeconomy Business Series
October 15, 2024
Techeconomy
PRIVACY IN THE ERA OF AI: GETTING YOUR BUSINESS READY
May 30, 2024
Techeconomy
Unravel the Secrets of Marketing Everywhere All At Once with Isaac Akanni from Infobip | Infowave Podcast Episode 1
February 9, 2024
Techeconomy
The Role of Ed-tech in Life Long Learning and Continuous Education
October 19, 2023
Techeconomy
Search Results placeholder

WHAT IS TRENDING

https://www.youtube.com/watch?v=g_MCUwS2woc&list=PL6bbK-xx1KbIgX-IzYdqISXq1pUsuA4dz

Follow Us

  • About Us
  • Contact Us
  • Careers
  • Privacy Policy

© 2025 Techeconomy - Designed by Opimedia.

No Result
View All Result
  • News
  • Tech
    • DisruptiveTECH
    • ConsumerTech
      • Accessories
      • Phones
      • Laptop
      • Gadgets and Appliances
      • Apps
    • How To
    • TechTAINMENT
  • Business
    • Telecoms
      • Broadband
    • Mobility
    • Environment
    • Travel
    • Commerce
    • StartUPs
    • TE Insights
    • Security
  • Partners
  • Economy
    • Finance
    • Fintech
    • Digital Assets
    • Personal Finance
    • Insurance
  • Features
    • IndustryINFLUENCERS
    • Guest Writer
    • Appointment
    • EventDIARY
    • Editorial
  • Apply
  • TecheconomyTV
  • Techeconomy Events
  • BusinesSENSE For SMEs
  • TBS

© 2025 Techeconomy - Designed by Opimedia.

Translate »
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.