The second coming of Donald Trump as the 47th President of the United States of America might throw a big blow on the naira, an economic expert, Ugodre Obi-Chukwu said.
Obi-Chukwu said Trump’s assumption into office could strengthen the dollar thus weakening currencies across the African continent.
According to him, a stronger dollar translates to an increase in the cost of debt service and heightened inflation.
In an outlook titled “Nigeria’s Macroeconomic Outlook 2025: Nigeria in Transition: Reforms, Global Shifts and Strategic Opportunities”, Obi-Chukwu also said that increased US oil production may suppress prices thereby reducing revenue for oil producers.
In addition, he said that with Trump’s executive order on immigration, travel restrictions are bound to lower FX remittance and further impact on its reverse and consumption.
“Businesses should hedge against a worst-case scenario of N2,200/$1 and take advantage of a best-case scenario of N1,700$1,” Obi-Chukwu advised.
He also stated that US tariffs might put pressure on import costs and thereby worsen Africa’s inflation.
“Global efforts to curb inflation via rate cuts could make frontier markets like Nigeria attractive. For portfolio inflows.
“Higher interest rate creates opportunity for local currency investments in government securities above 25 per cent,” he noted.
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