Implications of the depreciating Naira and a few perks

           The Nigerian naira is at its lowest ebb of #305 to a dollar, the lowest it has been in in 43 years. I have the feeling that its not done quite falling. With all the bedlam and woe, there are still certain positive perks to this horrible development that is the stuff night mares are made of especially for an economy like ours.

Smaller trade deficit
When the currency depreciates, the primary beneficiaries of such an event are
exporting industries. The exchange rate sets the price of domestic goods
relative to that of foreign goods. If the currency depreciates, the exports
become cheaper and more competitive on the international markets, boosting
trade balance and narrowing trade deficit for the country.

Employment boost
Increased employment is also another byproduct of currency depreciation, and
it comes as a result of the increase in domestic production for exports and
local consumption. Keeping all other things constant, as the exporting
industries increase their activities, they hire more labor domestically to produce
more products and services for international markets. This creates a boost to
employment and better income opportunities for workers.
Currency depreciation makes foreign goods more expensive compared to
domestic goods, leading to increased demand for domestic products and
services. This also contributes to the increase in domestic economic activity
and boosts employment.

Slowed Net Indebtedness Growth
If the country has a large trade deficit as a result of imports exceeding exports,
it finances its trade imbalance by borrowing from the rest of the world. As the
trade deficit narrows or turns into a trade surplus, the country does not have
to borrow as much and the growth in net indebtedness may slow down.
However, this benefit may be completely counterbalanced by a rise in the cost
of servicing debt, if it is denominated in the foreign currency.

Beggar-Thy-Neighbor Policy
Certain countries engage in the Beggar-Thy-Neighbor policy, where the country
establishes import barriers and conducts its monetary policy to produce
currency devaluation with an intent to gain the above-mentioned benefits.
Although such a policy can be beneficial for the country in the short-term, it
may result in a trade war or currency war with the country's trading partners
 
source:www.investopedia.com