An Empirical Investigation of Currency Devaluation and Import Price Dynamics in Nigeria (2010–2024)

This study empirically investigates the relationship between currency devaluation and import price dynamics in Nigeria over the period 2010–2024.Given that price dynamics constitute a fundamental component of international trade, their neglect poses significant consequences for the Nigerian economy. Primary data were collected through structured questionnaires administered to 150 respondents drawn from both private and public sectors. The analytical framework comprised descriptive statistics, Pearson Product Moment Correlation, regression analysis, and co-integration testing employing the Engle-Granger approach. The findings reveal that while devaluation marginally improved the competitiveness of Nigerian exports, it significantly escalated the prices of imported goods, constrained access to foreign exchange, and intensified inflationary pressures on consumers and businesses. The regression model indicates that perceived impacts on import prices, export competitiveness, and consumer welfare are statistically significant predictors of foreign trade outcomes, accounting for 83.6% of the variation (R² = 0.836). The co-integration test confirms a long-run equilibrium relationship among the key variables, suggesting that the effects of devaluation on trade are not merely transitory but reflect stable structural relationships. The study concludes that currency devaluation, despite its potential benefits for export competitiveness, is insufficient on its own to improve Nigeria's trade performance. Accordingly, it recommends strengthening local production capacity, diversifying the export base, implementing complementary fiscal and monetary policies, and addressing structural constraints to achieve sustainable trade benefits.

Currency Devaluation, Import Prices, Naira, Nigeria, Trade Dynamics

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