Business
Naira Vs Dollar: ‘Why Prices Of Foodstuff, Other Goods Will Remain High Despite Naira Appreciation’
Naira Vs Dollar: ‘Why Prices Of Foodstuff, Other Goods Will Remain High Despite Naira Appreciation’....KINDLY READ THE FULL STORY HERE▶
Despite the recent gains of the Naira against major foreign currencies, prices of goods and services in Nigeria are unlikely to decrease anytime soon. Several factors contribute to this scenario, and their impact on prices takes time to materialize.
On Thursday, US Dollars traded for ₦1,060, marking a significant gain compared to the peak of ₦1,900 per US Dollar recorded in February this year.
Currency traders in the parallel market, known as bureau de change (BDC) operators, have adjusted their rates accordingly, with the buying rate set at ₦1,200 and the selling rate at ₦1,230, maintaining a profit margin of ₦30.
The delay in price decreases can be attributed to various factors:
- Time Lag: The impact of the Naira’s appreciation against the Dollar on prices of goods and services takes time to materialize.
- Sticky Prices: Prices tend to rise quickly in response to increases in production costs but are slow to decrease when these costs go down.
- High Energy and Transportation Costs: Despite the Naira’s appreciation, energy and transportation costs have remained high, contributing to sustained high prices.
- Inadequate Government Support for Local Manufacturing: Nigeria’s heavy reliance on foreign currency and inadequate government support for local manufacturing hinder the effectiveness of exchange rate changes in reducing prices.
- Business Hesitancy: Businesses may be hesitant to lower prices immediately due to uncertainty about the sustainability of the Naira’s appreciation, leading to “sticky prices.”
- Economic Structural Issues: Insecurity, inefficiencies in distribution networks, and import dependence on manufactured items contribute to sustained high prices.
Experts predict that prices will eventually decrease, but not until the impact of the exchange rate changes has had time to trickle down and other cost factors have decreased. Fiscal policies that promote local production and address structural bottlenecks are essential for achieving sustainable price stability.
In conclusion, while the recent appreciation of the Naira against major foreign currencies is a positive development, its immediate impact on prices is limited by various factors, and sustained efforts are needed to address structural issues in the economy.
The future of Nigeria’s Naira-for-Crude policy remains in limbo as negotiations continue between the Nigerian government and Dangote Refinery. The six-month agreement between the Nigerian National Petroleum Corporation (NNPCL) and Dangote Refinery expired on March 31, 2025, without a renewal, leading to the suspension of the refinery’s sale of refined petroleum products in Naira. However, the refinery has continued processing approximately 400,000 barrels of crude oil daily, with 35% of the crude sourced from international markets, particularly Brazil and Equatorial Guinea.....KINDLY READ THE FULL STORY HERE▶
Although the policy’s future is still under review, sources suggest that its economic implications, especially concerning fuel prices and foreign exchange rates, make it crucial to the national economy. Despite challenges in crude supply from NNPC, Dangote Refinery has expanded its global sourcing and is currently sourcing crude from Brazil’s Petrobras and Equatorial Guinea.
No official agreement has been reached yet to extend the Naira-for-Crude deal. The Nigerian government’s committee in charge of the policy is waiting for recommendations from the Nigeria Upstream Petroleum Regulatory Commission before proceeding. Meanwhile, the refinery’s management has expressed uncertainty regarding the renewal of the deal, citing concerns over the financial strain and volatility of exchange rates. The future of the policy remains unclear, with NNPC expected to supply crude oil to Dangote Refinery in April, but payment terms are yet to be finalized.
The price of cement, a vital resource for Nigeria’s construction industry, has witnessed significant changes recently, with rates fluctuating depending on brand, location, and market factors. Here is an overview of the current prices for some leading cement brands:....KINDLY READ THE FULL STORY HERE▶
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Dangote Cement: The cost of a 50kg bag of Dangote Cement ranges between ₦8,000 and ₦10,300. Known for its high quality, Dangote Cement remains a preferred choice in various construction projects. Prices are generally lower in areas near production plants but tend to rise in regions requiring extensive distribution.
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BUA Cement: Priced between ₦8,000 and ₦8,500 per 50kg bag, BUA Cement is popular among builders due to its competitive pricing and stability. Prices may vary slightly depending on proximity to manufacturing sites.
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Lafarge Water Shield Cement: Priced at ₦20,000 per 50kg bag, this cement variant is specifically formulated for durability and resistance to moisture, making it ideal for projects in damp environments.
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Waterproof Cement JK: Available at ₦15,000 per 50kg bag, Waterproof Cement JK is engineered to offer exceptional protection against water ingress, particularly useful for wet construction sites.
Over the past year, cement prices in Nigeria have surged significantly. At the start of 2024, a 50kg bag cost around ₦4,500. By November 2024, the price rose to about ₦8,500, reflecting an increase of approximately 89%. This upward trend is attributed to factors such as rising production costs, increased demand, and logistical challenges.
Marketers predict a potential further increase in cement prices, emphasizing the need for stakeholders in the construction sector to stay informed and plan accordingly.
A recent survey conducted by Naija News has revealed a notable decrease in the price of cooking gas in Nigeria, offering much-needed relief to households and small businesses. According to the survey, the cost of refilling cooking gas per kilogram has reduced significantly from ₦1,350 to ₦1,020.....KINDLY READ THE FULL STORY HERE▶
This positive development is expected to ease the financial burden on Nigerian families and small enterprises, especially those that heavily depend on cooking gas as a primary energy source. The survey, encompassing gas stations and vendors from various parts of the country, shows that the reduced price may help lower the overall cost of living.
The revised price breakdown is as follows:
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1 kg of Cooking Gas: ₦1,020
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3 kg of Cooking Gas: ₦3,060
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5 kg of Cooking Gas: ₦5,100
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10 kg of Cooking Gas: ₦10,200
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12.5 kg of Cooking Gas: ₦12,750
This decline marks a significant shift from the previous upward trend in gas prices and is likely to positively impact the economy, particularly the food and hospitality sectors. Businesses that rely on cooking gas will experience reduced operational costs, ultimately boosting their profit margins.
Experts attribute the drop in cooking gas prices to several factors, including fluctuations in global energy costs and adjustments within local supply chains. Despite recent variations in crude oil and natural gas prices, the reduction is perceived as a welcome development for Nigerian consumers.
By spending less on cooking gas, households and small businesses will now see some financial relief in their monthly budgets, especially during these economically challenging times.
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