How Nigerian Startups Navigate the Currency Turmoil
- The Nigerian naira, Angola’s kwanza, and Malawi’s kwacha were among the five poorest performing currencies globally in 2023.
- Nigerian startups are adopting strategic approaches to cope with the currency crisis, including adapting expenses to local contexts, focusing on markets with lower foreign exchange risks, shifting business models to generate higher foreign currency revenues, and seeking investment in the local currency.
- Paystack faced challenges managing its foreign expenses due to the significant drop in the Nigerian naira's value, leading to the layoff of international employees.
The currency crisis in Africa, particularly in Nigeria, poses significant challenges for startups and businesses. The depreciation of the Nigerian naira has led to financial strains, forcing companies to lay off employees and adapt their strategies. While some startups are finding ways to cope by focusing on markets with lower foreign exchange risks and generating higher foreign currency revenues, the overall sentiment remains negative due to the expected further depreciation of the naira in the future.
