Naira’s 39% Drop Threatens Job Security For Nigerian Workers

The value of Nigeria’s currency, the naira, has fallen significantly against the US dollar in recent months. In simple terms, this means that the naira is now weaker compared to the dollar. 

Back in October 2023, you needed about 745 naira to get one dollar, but as of January 2024, you need over 1035 naira for the same dollar. This is a big drop in value, almost 39%. The CBN (Central Bank of Nigeria) is expected to take certain initiatives to handle this.

This situation is tough for Nigerian businesses, especially manufacturers. They often need dollars to buy things from other countries. But now, with the naira worth less, they have to spend more naira to get the same amount of dollars. This is hitting their profits hard.

Because of this, many businesses are finding it difficult to keep running as usual. The Manufacturers Association of Nigeria and other business groups are worried. 

They’re saying that if things don’t improve, they might have to cut down on their operations. This could mean closing factories or letting go of workers.

The reason behind this drop in the naira’s value is complex. The Central Bank of Nigeria tried to help by letting the naira’s value change freely against other currencies. They hoped this would make things better, but it hasn’t worked out as planned. The naira kept losing value.

The government tried other ways to fix the problem too. They got loans from the African Import-Export Bank to increase the dollars in the market, thinking it would help stabilize the naira’s value. But even this hasn’t stopped the naira from falling.

For Nigerian businesses, especially those that need to buy things from abroad, it’s a tough time. They’re paying more to get dollars, which is cutting into their profits. If this continues, we might see more businesses cutting back or shutting down, which is bad news for the workers and the economy.

If Nigerian businesses keep struggling because of the weak naira, workers could face big problems. Many might lose their jobs as companies cut costs or close down. 

A lot of people could find themselves without work, struggling to earn money. It’s a tough situation because when businesses are not doing well, they can’t afford to keep as many workers. 

So, it’s not just a problem for the companies, but also for the workers and their families who depend on these jobs.