Effect of Devaluation of Naira on Price Level

EFFECT OF DEVALUATION OF NAIRA ON PRICE LEVEL
IN NIGERIA

BY

¹MR. IKECHI, PRINCE OBINNA MBA (Marketing), MCIM, MNIMN, Lecturer, Marketing Department; Rivers State College Of Education, St. John’s Campus, Port Harcourt, Nigeria. Email: [e-mail]. Tel: [phone];

²HON. TAMUNO, MAUREEN PIRIBONEMI KBVM
MBA (Marketing), FCIM, AMNIM. Member, Rep.: Ogu/Bolo Constituency & Chairman,
House Committee on Education Rivers State House of Assembly, Port Harcourt, Nigeria
E Mail: [e-mail]; Tel: [phone]
&
³MR. IGONI, MORDECAI JAPHETH M.ED (Business Education), Lecturer,
Business Admin. Department; Rivers State College Of Education, St. John’s Campus, Port Harcourt, Nigeria. Email:[e-mail]; Tel: [phone]

ABSTRACT
Almost all the countries of the world have devalued their currencies at one time or the other with a view to achieving certain economic objectives. This paper intends to demonstrate the existence of contractionary devaluation in Nigeria by drawing from previous studies. In this study however, we intend to evaluate the effect of devaluation on the general price level in Nigeria; determine the possible way out of the dilemma of price increase in Nigeria in the face of devaluation and evaluate the antecedents of entrepreneurs in the event of devaluation in Nigeria. This study is basically empirical in nature; therefore, the research design used is the desk research. Devaluation pushes up import duties, since duties are computed based on the prevailing exchange rate. This puts pressure on both imported finished goods and production costs. Purchasing power of citizens would reduce with increases in price level and this would worsen the pervasiveness of poverty. Speculative activities in the economy will increase as a result of instability. In the aftermath of the misfortunes of the Naira, manufacturers and importers adjusted the prices of their products upwards causing major distortions to the

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