Business
‘Inflation Weakens Naira By 15%’
An economic group, Nigerian Economic Summit Group (NESG), has said inflation has so far weakened the value of naira by 14.9 per cent.
The group also added that the naira redesign of the Central Bank of Nigeria (CBN) has further triggered the devaluation of the country’s currency.
The economic group made this known in its 2023 Macroeconomic Outlook Report, with the title ‘Nigeria in Transition: Recipes for Shared Prosperity’ which reflected on the issue of inflation in the country, noting the major inflationary drivers.
“A further breakdown of the inflation numbers showed that the Food and Core inflation averaged 20.6 per cent and 15.8 per cent, respectively in 2022. Since the country relied heavily on imports for manufactured and industrial intermediate goods, global inflationary pressure permeated all productive activities in Nigeria.
“Domestically, a combination of cost-push and demand-pull factors constituted significant drivers of the surge in the general price level.
“Some of these factors include shortage of industrial inputs, insecurity, lower agricultural productivity, the high price of fuel, logistics problems, increased VAT, increasing energy cost (electricity), and foreign exchange scarcity.
“Since the demand for necessities is relatively inelastic – the change in demand is relatively unresponsive to the change in price , many businesses transferred additional production costs to consumers, resulting in higher overall prices for goods and services, particularly food”, the report explained.
It further noted that the purchasing power of N1000 in January 2022 fell to N851 by the end of the year.
“On the welfare side, rising inflationary pressures reduced households’ purchasing power and access to necessities. To illustrate, the purchasing power of N1000 in January 2022 had fallen to N851 by the end of the year.
“This situation exacerbates various forms of poverty – monetary and non-monetary deprivation – and contributes to Nigeria’s multi-dimensional poverty, which is currently estimated to affect over 6 out of every 10 Nigerians,” the report explained.
The NESG also said that the naira depreciated by 2.4 per cent and 30.01 per cent in the Investors and Exporters and parallel market rates.
It said, “In 2022, Naira depreciated by 2.4 per cent and 30.1 per cent in the Investors’ & Exporters (I&E) and the parallel market rates to N451/US$ and N745/US$, respectively.
“Consequently, the premium (the gap) between the official and the parallel markets expanded from N55 (18 per cent of the official rate) at the beginning of the year to N294 (65 per cent) at the end of 2022.”
The NESG added that the naira depreciated, especially in the parallel market, due to the move by the CBN to redesign the country’s currency.
“Also, in December 2022, the Monetary Authority initiated the redesign of the N200, N500, and N1,000 notes to manage Naira liquidity. This action triggered further depreciation of the Naira against the US dollar in the foreign exchange rate market, especially the parallel market rate.
“Aside from the CBN currency redesign, other issues that triggered Naira depreciation include US monetary policy tightening that strengthened the US dollar and the proliferation of political activities with the US dollar.” it stated.
It was also noted that the inflation rate will likely average 20.5 per cent in 2023 and the unemployment rate will increase by 37 per cent with a poverty headcount at 45 per cent in this year 2023.
By: Corlins Walter
Kolomoni Microfinance Bank has awarded grants to five female entrepreneurs to boost their businesses as part of its commitment to promoting women in business.
The initiative, organized to mark International Women’s Day, was themed “Accelerate Her Growth.”
According to the bank, the decision to support women was inspired by World Bank data, which shows that 41 percent of Nigeria’s micro-businesses are owned by women.
Delivering the keynote address, business strategist, Ebun Akinwale, emphasized that entrepreneurship requires resilience, creativity, and passion.
She illustrated this by recounting her own business challenges and highlighting the critical role passion plays in overcoming obstacles.
The event underscored Kolomoni’s mission to empower women and support small businesses in Nigeria.
Other speakers at the occasion were Odunayo Oyebolu, a seasoned entrepreneur; Victori Ajiboye, a marketing strategist with global experience; and Simi Ojumu, a finance expert.
The beneficiaries said the financial support was a validation of their hard work and a boost of confidence towards scaling through in their businesses.
The winners were selected after sharing their entrepreneurial journeys and presenting business proposals for financial assistance from the bank.
The 8th edition of the Nigeria Small and Medium Enterprises (SMEs) Summit and Awards (Nigeria SMEAwards) is set to take place in Lagos for the first time in its history, marking a significant milestone for this prestigious event.
Endorsed by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), the annual awards celebrate the entrepreneurial spirit driving Nigeria’s economy.
The visionary convener of NigeriaSMEAwards 2025, Adedayo Olalekan, said, “Governors from Zamfara, Sokoto, Ebonyi, Borno, Enugu, Ekiti, Benue, and Kaduna States have all implemented transformative initiatives that have greatly benefitted local enterprises.
“Their contributions will serve as a beacon of inspiration for the nation.”
Speaking at a recent press conference in Lagos, Olalekan emphasised that the event would introduce a fresh and unique approach, moving away from tradition.
“Despite economic challenges, Nigerians continue to show an unwavering commitment to progress”, he said.
He noted that the awards will not only honor outstanding individuals, but also recognise the critical role state governments play in nurturing vibrant SMEs.
“State governments have been instrumental in fostering a supportive environment for SMEs, which in turn benefits both the awardees and the larger economy.
“With major banks like Providus, Access, and First Banks competing for top honors, the 8th NigeriaSMEAwards promises to be a night of celebration, recognising exceptional contributions to Nigeria’s SME landscape”, Olalekan added.
Amid global challenges such as inflation, geopolitical instability, and the ongoing conflict in Ukraine, Nigerians continue to show remarkable resilience.
Their efforts, according to reports, have contributed to job creation, economic growth, and overall prosperity, with SMEs at the forefront of this success.
This year’s awards will recognise governors who have made significant strides in advancing the SME sector within their states.
Small and Medium Enterprises (SMEs) consultants in Rivers State have called on entrepreneurs to be focused and avoid distractions.
The experts, who were speaking on the recent developments about the change of leadership in the state, said entrepreneurs need to put more efforts in their businesses in order to break even in the present situation in Rivers State.
Speaking in a chat with The Tide, an international SMEs consultant, Amb. Larry Goodwill Ajiola, said the political moves is capable of distracting SMEs who are not grounded in their businesses, adding that “the serious minded business men and women would utilise the opportunity to increase their revenues”.
Amb Ajiola, who is the President and Chief Executive Officer (CEO) of Rumuomasi Co-operative and Credit Society Limited, Port Harcourt, said, “Rugged entrepreneurs look out for business opportunities in situations around them, whether good or bad”.
He reiterated that the loan facility given to 3,000 SMEs in the state revived and expanded businesses, adding that the empowered businesses should continue to push, no matter the situation.
“credit is a powerful tool for achieving financial security.
“We can only keep imagin the economic value that the over 3,000 MSMEs would add to the positive economic dynamics of Rivers State and the Local Government Areas in terms of Gross Domestic Prooduct (GDP), increased tax returns, employment creation, income distribution, and production of goods and services”, he said.
Another SMEs Expert, a business consultant and SMEs trainer, Mr. Chisom Sam-Orji, in his advice, noted that every SME in the state should realize that change is the only constant thing.
He said SMEs should also know that “tough times never last, but tough people do”, adding the need for every entrepreneur to stay focused on creating value and remain resilient.
“This is not the time to be distracted by every noise around your space, but to maximize every time you have to focus on the essentials and keep creating value.
“For some people, it may just be the time to diversify, create new products and services to serve a new or existing market. But this must be based on the facts available to you via research and market surveys”, he said.
The SMEs expert also said the present time in the life of an entrepreneur is a time to cut off unnecessary excesses that surround one’s business.
“Those extra costs that may hamper your growth in this season and beyond, and focus on just essentials.
“SMEs should find certain leverages that are available to aid their business growth. This could be in form of grants, knowledge, and other leverage tools.
“Collaboration is one big way to grow in this season. Finding ways to collaborate with like minds instead of competing could enable a product or service gain advantage in the market and beyond.
“They should also find ways to sustain and grow their customer relationship as this is key to sustaining business flow. They must seek new and efficient ways to serve their customers and gain their loyalty”, he stated.
He further called on every entrepreneur to keep building capacity and never take their eyes off their visions, adding the need to muster every courage it takes to keep building and moving forward.
Lilian Peters