Small and medium-sized businesses across Nigeria are groaning under the weight of the forex crisis as the naira continues to fall and the foreign exchange market remains unstable.
For many business owners who depend on importing raw materials and finished goods, especially electronics, clothing, industrial equipment, and household items, the situation has become almost unbearable. The rapid fall in the value of the naira has led to skyrocketing import costs, smaller profit margins, and frequent disruptions in operations.
In recent months, the Nigerian currency has suffered heavy losses due to several factors like falling global oil prices, rising inflation, low foreign reserves, and tight dollar supply in the market. The Central Bank of Nigeria (CBN) has tried to control the situation by placing restrictions on forex, selling dollars to authorised dealers, and operating multiple exchange rates. However, these efforts have not brought lasting relief.
Manufacturers are among the worst hit. The Manufacturers Association of Nigeria (MAN) has revealed that the failure of the CBN to pay $2.4 billion in forex forward contracts has caused huge losses of more than N1.5 trillion. Many small businesses have already closed down, and job losses are increasing across the country.
Mr. Chinedu Okeke, who runs an electronics store at Ajao Estate in Lagos, said the forex crisis has turned business into a nightmare. “I used to import directly from China,” he said. “But now, the exchange rate changes so fast that my plans are always useless. What I budgeted last month is no longer valid. Everything is more expensive now, yet people are buying less.”
He added that prices of goods, especially electronics, go up daily because most items are priced in dollars—even when bought locally. “Distributors are adjusting their prices every day. We small retailers can’t keep up,” he said.
Mrs. Sunbo Adetifela, another small business owner in FESTAC, shared similar frustrations. “This forex instability is killing my business. The last time I brought in a container, I had to pay N1,500 per dollar. And now, I need almost twice the amount I used to spend just to get the same quantity of goods,” she said. “But I can’t increase my prices too quickly because customers can’t afford it.”
The struggles of these entrepreneurs are not isolated. Across Nigeria, many small-scale importers and manufacturers are either downsizing or completely shutting down operations due to high costs and unpredictable exchange rates.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, explained that uncertainty is one of the biggest enemies of business. “Businesses need predictability to plan. You can’t plan your investment or contracts when policies keep changing,” he said. “No serious investor will put money in such an unstable environment.”
The Director-General of MAN, Mr. Segun Ajayi-Kadir, added that manufacturers who entered into forward contracts with the CBN are now stuck with huge losses. “These companies were depending on the CBN to fulfil its dollar obligations. Now, they are battling cash flow issues, reduced production, and staff layoffs. If nothing is done, more firms will shut down,” he warned.
Also weighing in, Mr. Segun Kuti-George, National Vice Chairman of the Nigerian Association of Small-Scale Industrialists, blamed the forex crisis for the sharp decline in the importation of industrial supplies. “Businesses are struggling to access forex. Many have had to scale down or even close shop because they can’t import the raw materials or machinery they need,” he said.
The impact is not just on businesses alone. With fewer imports and limited production, prices of goods are rising, inflation is worsening, and unemployment is growing. Many Nigerians now fear that the situation, if not handled properly, could push more people into poverty.
Analysts say Nigeria must work towards increasing its foreign reserves, stabilising the naira, and providing support to small businesses. If not, the backbone of the economy—SMEs—could collapse under the weight of the forex crisis.
