It’s no longer news that the CBN has devalued the Nigerian Naira and there have been some effects of the Naira devaluation which includes:
- Increased shopping costs for international buyers
- Rise in airfares for major international routes
- Increase in the cost of imported products
- Increase to the cost of goods and services
- Greater difficulty in paying external debts
- Investors would require higher returns to compensate for the inflation
- The CBN may raise interest rates to fight off inflation
However, the only people that may remain safer from the Naira devaluation action are the ones who held on to assets rather than the Naira. People who have houses, lands, stocks, domiciliary accounts, foreign bank accounts and so on are the ones who would hardly feel the pain of Naira devaluation. However, for those who still operate savings accounts in Naira, have debtors owing them in Naira and so on are the ones more likely to have lost some value of their money.
This situation would affect traders more, especially traders who import items from abroad to sell in shops. The cost price has increased, tops that usually go for N1,500 are now sold for N1,800 and the ones that go for N1,800 are now N2,000. People who are in business will tend to hoard their commodities to sell at a higher rate.
For Nigerians who love to buy things from foreign countries or websites like Amazon, they now have to spend more Naira to get the items they want and this is because the exchange rate has increased by about 8%.
The increase has also affected airfares for flights to destinations outside the country, which are usually charged in dollars. For instance, a direct return flight from Lagos to Dubai, which previously cost about N110,000, now goes for about N150,000, a difference of 36.3 per cent. Even a Lagos to Johannesburg return ticket, which used to cost N120,000, now goes for about N155,000, indicating a rise of 29.1 per cent. Frequent fliers and passengers can help themselves to reduce the effect of the naira devaluation on their purse by booking early for their foreign trips.
Chances are that if the Naira continues to lose value, the Labour Union will demand for a salary increase and the cost of things in Nigeria such as food, books, housing and so on will also increase.