It has been observed that the depreciation of the naira has led to increased affordability of certain domestically produced goods, while the CFA franc, utilized in several West African nations, has experienced an appreciation in value.
Furthermore, data obtained from the National Bureau of Statistics (NBS) reveals a significant increase in export revenue for manufactured goods during the first half of 2024 (H1’24). The revenue recorded during this period was 72.24 percent higher compared to the N435.15 billion reported in the second half of the preceding year (H2’23).
Analysts attribute this increase to currency devaluation. Adeola Adenikinju, President of the Nigerian Economic Society, noted that devaluing a currency can make exports more competitive. "One of the reasons countries devalue their currencies is to make exports cheaper relative to other goods, thereby increasing sales," he explained.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), echoed this sentiment, asserting that the rise in exports is indeed a result of the naira's depreciation. "Devaluation typically creates opportunities for exports. The surge would likely be even greater if it included unrecorded exports. There are numerous incentives for exporters, particularly those arising from currency devaluation. As the naira depreciates, export opportunities expand because our goods become more affordable," Yusuf stated.
In a recent statement, Segun Ajayi-Kadir, the Director General of the Manufacturers Association of Nigeria (MAN), indicated that the naira's devaluation primarily benefits a limited number of manufacturers capable of exporting. He pointed out that production costs have risen significantly.
“Their production expenses have escalated as their raw materials are not entirely sourced from third countries. The import duty stands at over N1,600 per dollar. Consequently, the devaluation has inflicted severe challenges on many manufacturers,” he explained.
In addition, Gabriel Idahosa, President of the Lagos Chamber of Commerce and Industry (LCCI), agreed that while nations frequently devalue their currencies to boost exports, in Nigeria's case, the increase in exports appears to be coincidental rather than the result of a deliberate government policy.
"The rise in exports is a natural consequence of the devaluation caused by other factors, not a strategic move by the government to boost exports. It is not a deliberate policy decision to devalue the currency in order to increase exports," Idahosa noted.