26.8 C
April 14, 2024

Naira Devaluation Boosting Food, Grain Export to West African Countries, Says NACCIMA

Barrister Dele Kelvin Oye, the National President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), stated that the recent devaluation of the naira has encouraged food and grain exports to West African countries. 

Responding to comments by the Nigeria Governors Forum (NGF), Barr. Oye acknowledged that while naira devaluation presents broad economic challenges, it also inadvertently makes Nigerian goods more competitive in international markets due to their lower prices.

He explained, “The devaluation of the naira, while presenting broad economic challenges, appears to have inadvertently enhanced the competitiveness of Nigerian food and grain exports within the West African region. This phenomenon is rooted in exchange rate economics. A weaker naira translates to less expensive Nigerian goods for buyers using stronger currencies. Consequently, Nigerian food and grains are now more competitively priced compared to similar products from countries with stronger currencies.”

Barr. Oye further stated that this price advantage could lead to an increased demand for Nigerian exports within the region.

However, he also addressed the potential downsides, including inflationary pressures on imported goods, particularly agricultural inputs like machinery, fertilizers, and pesticides. These increased costs could lead to higher domestic production costs over time.

“On inflationary pressure,” Barr. Oye said, “the cost of imported goods, including agricultural inputs such as machinery, fertilizers, and pesticides, will increase, potentially driving up domestic production costs over time.”

He also noted the potential consumer impact: “The increased export of food and grains could lead to a reduction in domestic supply, thereby escalating food prices locally and aggravating food insecurity in Nigeria.”

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