Naira Depreciation: Business Owners Recount Struggles

The subject of the exchange rate has become a topical issue in Nigeria following the devaluation of the naira as one US Dollar is now traded at N712.

The devaluation of the naira has proven disastrous to production, citizens, importation, exportation, goods, economy and most especially business owners as prices of goods have skyrocketed due to importers passing the increased prices to retailers.

Business owners affected by the recent exchange rate spoke with AllNews Nigeria and shared their present challenges.

Tolulope Benjamin, a retailer who sells beauty products said the currency depreciation has brought about an increase in the cost of goods by 7 per cent.

“For me, the recent fall in the naira has brought about an increase in the cost of goods by up to 7 per cent, while some products are even higher.

“This means goods that would normally cost N2,000 now cost N2,140 and goods that normally cost N5,000 are now N5,350”, she disclosed.

According to her, the increase might look small, but it is really affecting the growth of her business because there is no corresponding increase in income.

“The increase might not look so much, but it is actually a lot considering the fact that there is no corresponding increase in income.

“People still have to purchase things with the same income as before, therefore they go for more pressing needs beauty a product is not top on their priority.

“An individual will have to choose to purchase food which is also already expensive before thinking of other things.

“My business has recorded a drop in sales as people wish to buy products, but do not have the financial backing to do so,” Benjamin added.

 Olaniyi Afolabi, a trader who sells food items and other consumer goods lamented the negative impact of the naira depreciation on his business as all the prices of goods have been inflated.

“Generally, food items are now really expensive due to the increase in the dollar rate.

“For example, we used to buy sardines at the rate of N200 and sell them to our customers for N300, but since the naira depreciated, we now buy one sardine at the rate of N500 and sell them for N600.

“Another example is palm oil. Before now, a keg of palm oil was sold for N2,800 but now it is N4,800, which is a N2,000 increase.

“In fact, sometimes, some of these items would get spoiled because customers cannot afford them due to the increase in price, and this will be our own loss”, Afolabi said.

Also commenting, a baker who sells cake and snacks (who pleaded for identity to be shielded) said the dollar rate has had a huge effect on her business because most of the baking ingredients are imported.

“The dollar rate has affected my cake business a lot because most of the ingredients I use for baking are imported, and those that are even produced in Nigeria are manufactured from imported ingredients.

“For example, flour was sold for N1,000 per paint last year, but as the dollar rate increased, the price also increased.

“Now, it is sold for N1,900, which is almost a 100 per cent increase”, she stated.

Olojede Biodun who deals with the importation of shoes and sneakers said the increase in the dollar rate has brought about a 10 per cent decline in sales 

“There has been an increase in the price of goods, especially on sneakers that are not made in Nigeria, which has brought about a 10 per cent decrease in sales following the recent increase of the exchange rate as customers are reluctant to abide by the new prices.”

Olarinde Shulammite, a retailer specialising in the sales of jewellery and watches said the prices of every item have increased due to the increase in the exchange rate.

“The prices of every item have automatically increased because these goods are being shipped from other countries with the dollar, which has resulted in low sales for me because customers are extra careful with what they spend their money on.”

Damilare Idowu, a graphic designer and computer technician shared that the exchange rate has resulted in an increase in the prices of laptops.

“I help people in the purchase of laptops and the laptops are imported and as a result of the naira depreciation, the prices of laptops have increased.”