Is There a Positive Side to the Naira Losing Value?

The naira fell from about ₦460 to over ₦1,600 per dollar in just two years and this has left many Nigerians worried. 

rFood is more expensive, imports cost a fortune, and even basic services have become harder to afford. But amid the daily struggles, could there actually be some benefits hidden in this sharp depreciation?

It sounds strange, even frustrating, but some economists say yes, Nigeria might stand to gain more than we think.

Expert says a cheaper naira can boost local exports

Ikemesit Effiong, a data expert and partner at SBM Intelligence, believes Nigeria doesn’t necessarily need a strong naira, it needs one that supports exports. 

His point is simple, when the naira falls, anything produced in Nigeria becomes cheaper in dollar terms, making our products more attractive to international buyers.

If a Nigerian company sells a product abroad for $10, it would have earned ₦4,600 in May 2023. Today, that same $10 brings in ₦16,000. That’s more revenue for the company. And if these companies grow, they can hire more people and pay better salaries.

Crude oil and remittances – More naira, more cash

Nigeria earns most of its foreign exchange through crude oil and remittances. With the naira now worth less, each dollar Nigeria earns from oil sales gives the government more naira to spend locally. 

This could mean more money for infrastructure, education, and public services, if well managed.

The same applies to Nigerians working abroad. Someone sending home $1,000 in 2023 would have given their family around ₦460,000. Today, that same amount is worth over ₦1.6 million. That’s a big jump in local value and could provide families with better financial stability.

It could attract more foreign investors

Believe it or not, a falling naira might actually attract foreign businesses. How? Labour and operating costs in Nigeria become cheaper in dollar terms. 

A company paying ₦1 million to a worker here is only spending around $600, far less than what they’d spend in other countries for the same work.

This cost advantage could encourage more companies to open factories and offices in Nigeria, creating jobs and helping to grow the economy.

Artificially boosting the naira isn’t the solution

Mr. Effiong warns against trying to force the naira to appreciate through artificial government control. According to him, this kind of strategy only helps those with insider access and connections, leaving everyday Nigerians worse off.

Instead of chasing a stronger currency, he believes Nigeria should focus on producing and exporting more. That means supporting industries, improving infrastructure, reforming regulations, and building the kind of economy that can compete globally.

Even Chatham House agrees

This idea isn’t just coming from local experts. Chatham House, a respected research institution in London, recently advised the Nigerian government not to fight the naira’s depreciation. 

They believe trying to do so could scare off investors and lead to even more capital leaving the country.

What’s the catch?

Of course, the benefits of a falling naira don’t come automatically. Nigeria must take active steps to improve production, support small businesses, expand its export base, and invest in human capital. Without that, the depreciation just becomes another hardship.

But if managed right, this tough situation could be a turning point, a moment when Nigeria finally shifts from being an import-heavy consumer economy to a competitive, export-driven one.

So yes, there might be a positive side to the naira’s fall. But it’s up to Nigeria to make it count.