Trans-border traders are turning away from Nigeria’s currency, the Naira, amidst its depreciation, opting instead for currencies like the CFA or non-francophone countries’ domestic currencies.
In recent months, the Naira’s status as the preferred currency for cross-border transactions has diminished, with traders expressing concerns over its depreciation.
Official figures reveal a concerning trend, with the Naira’s value plummeting from N1/1.5CFA in early 2023 to N1/0.37595CFA in the most recent assessment.
The repercussions of this depreciation are being felt across the region, particularly in the pricing of imported goods into Nigeria, resulting in a slowdown of business activities on both sides of the border.
“Most traders no longer accept Naira. It has lost considerable value over time,” explained Mr. Achi Collins, a Nigerian trader who spoke to Vanguard.
Even local transporters and vendors are opting for alternative currencies like the CFA, citing the unfavorable exchange rates and resultant losses incurred in converting Naira.
“Before, Naira was strong and widely accepted. Now, it’s just not worth the risk,” remarked Ibrahim Yakubu, a bike rider at the Seme border.
While some traders in border towns might still transact in Naira, they do so at inflated prices, further deterring its use.
“The Naira’s value simply can’t compete with the strengthening CFA,” noted Collins.
The situation reflects a broader challenge facing Nigeria’s currency, once dominant across the West African coast but now struggling to maintain its relevance amidst depreciation and dwindling acceptance in neighboring countries.
“As a Bureau De Change, we’re equally affected by the Naira’s decline,” stated Taiye Ekiti.
The depreciation rate of the Naira has been a concern for the Nigerian economy, with the International Monetary Fund warning of a potential 35% depreciation in 2024 due to local production challenges and a sharp rise in inflation.
With the Naira’s erstwhile prominence now a distant memory, traders and businesses alike are forced to adapt to a new economic reality, one where the once-mighty Naira struggles to retain its value and acceptance beyond Nigeria’s borders.
