Trouble for Nigeria as Naira Loses over N2000 against Another African Country's Currency
- Customs officers have linked Nigeria's foreign exchange issues to the 80% drop in economic activity at the border
- Over the past three years, the value of one thousand CFA francs in naira has fluctuated, rising from N300 to N2660
- As a result of the naira's continuous depreciation against the CFA franc, importers have started to boycott the borders
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Licensed customs officers manning the country's land borders have attributed the 80% decline in economic activity at the border to Nigeria's foreign exchange problem.
Source: Getty Images
According to them, the value of one thousand CFA francs in naira has changed over the last three years, going from N300 to N2660.
Why trading activities declined
The vice chairman of the National Association of Government Approved Freight Forwarders, Seme chapter, Ogonnanya Godson, said that commercial operations at the border have decreased since 2021 in a phone interview with The PUNCH.
“Cotonou CFA franc is now N2,660 to N1000 CFA franc. It started increasing from 300 CFA franc to N1000 three years ago till it got to where it is now and it is affecting our businesses. The way the exchange rate started increasing since 2023 is alarming,” Godson stated.
In his words, importers have begun to boycott the borders, particularly Seme, due to the naira's ongoing decline against the CFA franc.
“Importers don’t patronise these areas again because after clearing and paying for everything, the importer would lose. So activities have dropped by between 70 to 80% and the exchange rate of the dollar is affecting this area.
“The volume of activities here is just between 22 to 30 per cent. And this applies to other borders because of the exchange rate,” he stated.
In agreement with Godson's statement, Lasisi Fanu, a former chairman of the Association of Nigerian Licensed Customs Agents' Seme Chapter, acknowledged a decline in border activity.
“That is the simple truth and fact about the whole thing you can’t get anything less than what you were told about drop-in activities at the borders. Every day the CFA franc is appreciating and the naira is depreciating.
“Today I was told that the CFA franc has increased to between N2,650 and N2,700 for 1000 CFA franc. It started three years ago and has become worse since 2023,” Fanu stated.
Naira loses, CFA franc increases
Fanu asserts that the CFA franc increases value relative to the naira in the same manner as the dollar acquires value and the naira depreciates.
“Because whatever 1000 CFA franc can get in the Republic of Benin two years ago the same amount could still get that. So it is the naira that is depreciating.
“That is the reason there is no business, the boys that used to go to Cotonou for business said there is no more business there because the customers they have there said they can’t trade again because the exchange rate against the naira is too high,” he explained.
Abel Ayokunle, a former chairman of the ANLCA Idiroko chapter, said that every other importer at the border post is frustrated by the currency rate, except for those who bring raw agricultural items into the nation.
“The exchange rate has been frustrating us; the exchange rate has killed every activity at the Idiroko; it is only favouring exporters, I mean people that come into the country to buy things and take them out of the country, but for importers bringing in goods, it has not been easy for them.
“Except those who have goods from West Africa like agricultural goods that want to come with raw perishable goods because they are not involved in the exchange rate, these are not affected,” he lamented.
Naira faces rejection from traders
Legit.ng reported that in the wake of the recent depreciation of the Nigerian currency (naira), the local currency of the West African market region is facing additional challenges as trans-border traders have begun to refuse the currency.
Investigations conducted along the Seme border revealed that trans-border traders are increasingly hesitant to accept the naira. Instead, they favour either the CFA franc or the local currencies of non-francophone nations.
Previously, the naira held sway as the primary medium of exchange among traders across borders due to the substantial trade volumes between Nigeria and neighbouring countries in the sub-region.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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