The Central Bank of Nigeria (CBN) has advised businesses to embrace exporting activities in a bid to harness value from the weak state of the naira.
This advice was given by the Deputy Governor, Economic Policy, Central Bank of Nigeria, Muhammad Abdullahi, on Tuesday during his keynote address at the 11th National Economic Outlook: Implications for Businesses in Nigeria 2025 organised by the Chartered Institute of Bankers of Nigeria Centre for Financial Studies in Lagos.
The naira ended 2024 with significant devaluation across foreign exchange markets, recording a 40.9 per cent loss, and has struggled since the harmonisation of the segments of the currency market in June 2023.
Highlighting the value that a weak naira presents for businesses, Abdullahi said, “The unification of exchange rates, paired with a focus on exchange rate stability, offers transformative opportunities for businesses. Learning from China’s economic strategy, Nigeria’s competitive exchange rate can boost export-led growth. While a depreciated naira may raise import costs, it makes Nigerian goods more affordable and attractive on the global stage.
“To capitalise on this: Adopt export-oriented strategies: Target sectors with strong export potential, such as agriculture, manufacturing, and creative industries. Implement import-substitution models: Strengthen domestic production capabilities and reduce reliance on costly imports and explore value addition: Shift from exporting raw materials to processed goods, enhancing foreign exchange earnings.”
He mentioned that there was potential in Nigeria’s growing creative sector, “comprising music, film, crafts, and digital exports, holds vast potential. Businesses should explore international markets, digital platforms, and global tours to boost revenue.
“With reforms, declining inflation, and enhanced financing, the agricultural sector is set for growth. Emphasising processed agricultural exports can significantly improve foreign exchange earnings. The fintech sector, supported by increasing mobile money adoption and financial inclusion initiatives, will continue driving economic growth.”
In his opening remarks, President/Chairman of the Council Professor Pius Olanrewaju remarked on the situation of the economy in 2024, which was defined by both considerable problems and opportunities.
He stated that Nigeria’s GDP increased by 3.46 percent in the third quarter of 2024, up from 3.19 percent in the second quarter, indicating a modest rebound despite global and internal constraints.
“Inflation, however, remained a concern, as it stood at 34.6 per cent as of December 2024, driven by insecurity, energy costs, and supply chain disruptions. The exchange rate between the naira and the dollar ended the year at 1,535/$1, representing a 40.9 per cent depreciation for 2024.
“Despite these challenges, there were remarkable efforts toward economic diversification, showcasing the resilience and adaptability of various sectors of the Nigerian economy. Notably, the services sector was the largest contributor to Nigeria’s GDP growth in 2024, accounting for 53.58 per cent of the overall GDP.
“This reflects the expanding influence of industries such as ICT, financial services, trade, and creative enterprises in driving economic activity and fostering innovation. The agriculture sector also contributed 28.65 per cent to the GDP in 2024, while the oil sector contributed 5.57 per cent to the GDP in 2024.
“These achievements epitomise Nigeria’s ability to turn challenges into opportunities, a sentiment best captured by Albert Einstein’s timeless words: ‘In the middle of difficulty lies opportunity.’ As we move into 2025, we are presented with both the opportunity and responsibility to critically examine the economic landscape. This forum will help us identify the risks, harness the opportunities, and strategise for the future,” Olanrewaju asserted.
During his presentation, the founder of the BAA Consult and economist, Biodun Adedipe, stated there was a need to expand the economy in an inclusive, sustainable, and sustained manner.
He said, “If we achieve that, we move away from the episodic devaluation of the naira, which oftentimes was triggered by the fact that we got to some point where our external sector was very weak, and thus the need for foreign currency to pay for our import goods would make us devalue our currency, not following the template of economics that says devalue your currency to make your export cheaper, and you can sell more to the world.”
