EMPIRICAL ANALYSIS OF THE EFFECT OF DEVALUATION OF NAIRA ON THE LIVELIHOOD OF HOUSEHOLDS IN KADUNA NORTH LOCAL GOVERNMENT AREA, NIGERIA

Abstract

This study examined the effect of naira devaluation on the livelihood of households in Nigeria adopting a descriptive survey research design. The study was carried out in Kaduna North LGA of Kaduna State using a sample of 400 households selected through multistage sampling technique. The primary quantitative data were collected using a questionnaire, while data analysis was carried out using descriptive statistics and multiple regression analysis. Findings from the results of the data analysis revealed that naira devaluation had significant negative effect on household expenditures in Kaduna North LGA of Kaduna State (β1 = -0.145, P < 0.01); and inflation rate had significant negative impact on household expenditures (β2 = 0.584, P < 0.01). The study also revealed that the main coping strategy employed by households in Kaduna North LGA to mitigate the economic challenges emanating from naira devaluation was adjusting the overall budget and spending habits of the household. Based on the findings, the study concludes that naira devaluation have significant negative effect on the livelihood of households in Kaduna North Local Government Area. The study recommends among others that government and policymakers should implement targeted interventions such as target cash transfers, subsidies for essential goods and services to cushion the impacts of naira devaluation on households’ welfare.