Impact of Naira Devaluation on the Strategic Choices of Import-Dependent Entrepreneurs in Nigeria

This study examines how persistent naira devaluation affects the strategic decision-making of entrepreneurs whose businesses depend significantly on imported inputs, finished goods, or equipment, investigating the adaptive strategies employed to preserve viability in an environment of chronic currency depreciation. Naira devaluation creates acute cost pressure for import-dependent enterprises across a wide range of sectors including electronics retail, pharmaceutical distribution, food processing that uses imported equipment, and manufacturing reliant on imported raw materials. The study employs a qualitative strategic management approach, conducting semi-structured interviews with 25 import-dependent entrepreneurs in Lagos, Kano, and Abuja across four sectors. Interviews examined how entrepreneurs have adapted their business models, supply chain strategies, pricing policies, and financing structures in response to devaluation pressure over the 2020 to 2023 period. Thematic analysis was applied. Findings reveal five dominant strategic adaptation responses: local input substitution where technically feasible, aggressive forward purchasing of imported inputs during periods of exchange rate stability, price renegotiation with suppliers for deferred payment terms, customer price adjustment strategies that maintain volume through tiered product offering, and deliberate pivot towards export markets to capture hard currency revenue. The most financially resilient enterprises in the sample have diversified their import sourcing across multiple currency zones. Recommendations include the expansion of Central Bank of Nigeria's export financing facilities to support import-substitution investment among adaptive entrepreneurs. Keywords: naira devaluation, import-dependent entrepreneurs, strategic adaptation, currency risk, Nigeria.