Experts Predict Further Depreciation Of Naira

Financial analysts have predicted a further depreciation of the Naira.

The economic experts also predicted that Nigeria’s Gross Domestic Product will increase by almost three percent in 2022.

The experts made this claim while speaking during Blue Talks Enterprise Banking’s webinar on Thursday.

The Regional Head of Equity Research, West Africa, Standard Bank Group, Muyiwa Oni, while speaking at the webinar, forecasts that the naira’s value will drop as the year progresses.

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.

Oni further stated that 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 per cent in GDP.”

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.

The Chief Executive Officer, Stanbic IBTC Bank, Wole Adeniyi, while speaking on the prediction 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 to 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.

“However, despite the substantial contribution of SMEs to Nigeria’s economy, challenges still abound, such that the growth and development of different sectors face impediments.

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