In a significant financial setback, the Israeli firm Shikun we-Binui suffered a loss of at least 270 million shekels, a consequence of the severe depreciation of the Nigerian national currency, the naira. The end of January 2024 marked a dramatic plunge for the naira, as it lost 55% of its value in a mere span of three days, impacting businesses and investors.
Shikun we-Binui, a prominent player in the construction sector in Nigeria, had a significant business presence in the country. The company had a substantial order book in Nigeria, which, as of 2023, was valued at over NIS 4 billion. Therefore, the decline in the naira’s value had a direct impact on the company’s financial health.
The drastic collapse of the naira, marking its second steep fall in the last six months, is closely linked to the policy changes initiated by the country’s new president, Bola Ahmed Tinubu. After assuming power, President Tinubu decided to deviate from the previous policy of artificially propping up the naira’s exchange rate. Instead, he opted for a more transparent mechanism for determining the exchange rate. This policy shift, though aimed at bringing about transparency, resulted in significant volatility in the currency market, thereby causing the naira’s value to plummet.
