"We Expect": UK Research Group Predicts Naira to Hit N2,000/$ in 2024, Makes 4 Other Forecasts

"We Expect": UK Research Group Predicts Naira to Hit N2,000/$ in 2024, Makes 4 Other Forecasts

  • The London-based Economist Intelligence Unit (EIU) has forecasted five risks Nigeria might face in 2024
  • The EIU revealed in its country report that Nigeria will face further economic and social uncertainty
  • It said the naira will be devalued further, crossing the N2,000 per dollar threshold in 2024

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Economist Intelligence Unit (EIU) has stated five critical risks for Nigeria that could seriously affect the actualisation of essential goals of peace, economic progress and development in the coming months.

The EIU, in its March 2024, reported the high possibility of Nigeria moving too rapidly on market reforms and causing unrest that could force the government to make concessions on its reform policies and labour union strikes that could grind the economy to a halt.

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EIU predicts new exchange rate for naira
EIU said the naira will hit a new low of N2,000 per dollar in 2024 Credit: Bloomberg/Contributor
Source: Getty Images

Naira to hit N2,000 per dollar in 2024

The report said that the Nigerian currency will cross the N2000 per dollar threshold by the end of the year, and the risks of Boko Haram activities spreading from the Northeast to central Nigeria,

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The EIU report rated the risk of the naira crossing N2,00 per dollar by the end of the year, saying it highly probable.

They also revised their economic growth prediction for Nigeria upward from 2.2% to 2.5% based on higher than usually expected crude oil production and the impact of the Dangote refinery.

The group also sees a faster growth of 3.5% in 2025 while it forecasts consumer price inflation to reduce to 20% in 2025 and 17.4% in 2026 before reaching 11.7% two years later.

The EIU also sees a further devaluation of the naira in the coming years.

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The report says:

“The higher growth forecast has come despite sharper than expected monetary tightening in February. We expect the Central Bank of Nigeria’s policy rate to peak at 23.7%. This is 200 basis points higher than our previous forecast.”

Inflation to reduce

According to the report, the Nigerian economy will be the joint-largest in Africa, characterised by insecurity in many areas, with the security agencies over-worked to counter multiple crises effectively.

“High inflation, low economic growth and unpopular market reforms present substantial political stability risks, with Labour unions likely to be active, with a high risk of industrial action that affects the economy,” the report said.

Per the report, Nigeria’s economic growth will slow in 2024 as new inflationary pressure, currency devaluation and monetary tightening lead to a reduction in domestic demand.

It said monetary conditions will ease in 0024, boosted by investment in the power sector.

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EIU delivers robust predictions about the naira

In an earlier report, Legit.ng said that the Economic Intelligence Unit (EIU) predicted that the naira would depreciate by 10% or more in 2024.

It stated this in its Africa Outlook 2024 report titled "Strong growth amid heated elections and financial woes."

In addition, the domestic currencies of the Egyptian pound of Egypt, the kwanza of Angola, the birr of Ethiopia, and the Sudanese pound of Sudan are expected to fall by double digits during the year.

Source: Legit.ng

Pascal Oparada avatar

Pascal Oparada (Business editor) Pascal Oparada is a Mass Communications Graduate from Yaba College of Technology with over 10 years of experience in journalism. He has worked in reputable media organizations such as Daily Independent, TheNiche newspaper, and the Nigerian Xpress. He is a 2018 PwC Media Excellence Award winner. Email:pascal.oparada@corp.legit.ng