Gift Wada
Several business in Abuja are grappling to stay afloat amid the volatility in the foreign exchange market which has resulted in the continued depreciation of the naira against the dollar.
On February 13, the naira hit a record low of 1,534.39 per dollar at the official foreign exchange (FX) rate, marking a 1.33 percent depreciation at the parallel market, commonly known as the black market. The dollar traded at N1,505 on Monday compared to N1,485.
According to several business owners who spoke to BusinessDay, this fluctuation and the high dollar rate are significantly impacting their turnover. The prices of various products, especially imported goods, continue to rise, leading to a drop in demand.
Small businesses are particularly affected, citing challenges in restocking due to the high exchange rate. The harsh business environment, characterized by high operational costs, inflationary pressures, overhead expenses, and limited access to funding, exacerbates the struggles.
Sharing his account, Emmanuel Arinze, the Cheif Executive Officer, Mic2Dav Gadgets, a phone and laptop hub at the the popular business hub, bannex plaza in Abuja said itches impacted daily sales and income.
“The increase in dollar rates is affecting our businesses, especially since we import the phones we sell. When the dollar goes up prices go up and when prices go up, it affects our sales. If you sell 10 units of phones per day, it will reduce to 2 units or sometimes nothing because of high prices that keep customers away. A phone that costs N400,000 is now N600,000 now, the margin is too high and it affects sales.
“Also, when the price goes up it becomes difficult to make purchase, due to uncertainty on foreign exchange market. I had purchased about 15 units of a particular product for N320, 000 each, but the dollar dropped and prices dropped to N300,000, so I lost 20,000 per unit because I have to sell at market rate.
In addition to the foreign exchange fluctuation, Emmanuel alos flagged growing ecurity, lack of access to loans, poor government support as some other challenges affecting businesses.
“Even when the loan is granted , you will hardly access it , if you don’t have connections. And there are so many legit businesses with good ideas but it’s difficult without needed funding in form of loan or grants” he said.
Despite the challenges, Emmanuel said his business has stayed afloat over the years by adhering to principles of honesty and customer satisfaction. “Every business have their principles, our honesty has kept us going in the business . We always give value to every of our client. We place customer satisfaction over sales”, he said.
Another business owner, Esther Eleojoh who runs a small perfume business in Abuja also lamented that the high dollar rate has caused tye cost of her goods to rise significantly, which is alos affecting dialy income.
“A 20 ml perfume that costs N10,000 now costs N13,000 and clients are struggling to purchase. This is affecting daily turnover”, she cried.