By Oluyinka Onigbinde
Stakeholders in Nigeria’s maritime and trade sector have described the recent stability of the naira against the United States dollar as a major boost for import planning, investor confidence and economic predictability, even as they lamented that the gains are yet to translate into lower prices of goods for ordinary Nigerians.
The stakeholders, who spoke at different times with Shipping Position Daily, said the relative stability of the foreign exchange market has reduced uncertainty for importers and businesses that rely on foreign exchange, but noted that inflation and other structural challenges continue to keep the cost of goods and services high.
Former Acting National President of the Association of Nigerian Licensed Customs Agents (ANLCA), Kayode Farinto, said Nigeria’s decision to operate a unified foreign exchange market has significantly improved confidence in the economy.
According to him, one of the biggest problems that previously confronted importers and investors was the existence of multiple exchange rates, which distorted the economy and encouraged arbitrage.
Farinto admitted that although he initially doubted the policy would succeed, recent developments have proved otherwise.
“I was one of those who said it would not work, but I have been proven wrong. Today, the naira has stabilised and we now have one official exchange rate. That has brought predictability into the market, and predictability is one of the key indicators considered in the World Bank’s logistics performance index,” he said.
He noted that exchange rate stability has made it easier for businesses to forecast costs, plan imports and make investment decisions.
Farinto also linked the improved stability to the Federal Government’s foreign exchange reforms, including currency swap arrangements with China, adding that investor confidence has equally improved, as reflected in the performance of the Nigerian stock market.
He, however acknowledged that the gains recorded at the macroeconomic level have yet to reflect in the daily lives of many Nigerians.
“The macro-economy is improving, but the micro-economy has not. The average Nigerian is yet to feel the impact because prices have not come down,” he stated.
According to him, part of the problem lies with market practices, alleging that some traders deliberately hoard commodities and inflate prices to maximise profits.
He argued that beyond monetary reforms, government must strengthen market monitoring and food security measures to prevent artificial scarcity and price manipulation.
Also speaking, President of the Shippers Association of Lagos (SAL), Nicodemus Odollo, said the major achievement of the stable exchange rate has been the reduction in the volatility of prices rather than an actual reduction in the cost of goods.
“The only benefit is that it has sustained prices. Goods are no longer experiencing the sharp fluctuations we used to witness whenever the exchange rate changed. But the prices themselves are still high because today’s exchange rate is nowhere near what it was about ten years ago,” he said.
Odollo explained that while businesses can now plan with greater certainty, consumers should not expect an immediate decline in market prices.
Similarly, a chieftain of the National Association of Government Approved Freight Forwarders (NAGAFF), Stanley Ezenga, said exchange rate stability is expected to stimulate import activities by giving importers greater confidence to place orders.
He explained that importation is largely dollar-dependent and businesses are more willing to commit funds when they are assured that exchange rates will remain relatively stable.
“The stability of the dollar against the naira will increase the volume of importation because importers can now plan with confidence without worrying about sudden fluctuations in the exchange rate,” he said.
Ezenga, however, noted that the benefits would not be immediate because an import transaction typically takes about three months to complete.
“The stability has not lasted long enough for consumers to begin enjoying lower prices. As more importers place orders now, we expect the real impact to become noticeable in the third quarter,” he added.
While expressing optimism about the outlook, Ezenga stressed that exchange rate stability alone cannot address the challenges facing Nigeria’s ports and logistics sector.
He identified customs procedures, terminal operations, cargo examination processes and delays in container positioning as major bottlenecks that continue to undermine ease of doing business at the nation’s seaports.
According to him, improvements in cargo scanning, documentation processes and terminal efficiency are necessary to complement the gains from foreign exchange stability.
