In light of recent fluctuations in the Nigerian currency (Naira), the local currency in the West African market region is facing additional challenges as trans-border traders are now turning away from it.
Investigations conducted by Vanguard at the Seme border reveal a preference among traders on both sides for either the CFA franc or the domestic currencies of non-francophone nations.
Previously, the Naira held sway as the predominant currency in the sub-region, widely accepted for cross-border trade due to extensive economic ties with Nigeria.
It enjoyed convertibility in informal payment systems across neighboring countries.
However, Vanguard’s inquiries indicate a decline in the Naira’s acceptance starting in February, culminating in outright rejection by March 2024.
Traders, including Nigerians, expressed concerns over holding Naira, citing its consistent depreciation since the previous year, with the sharpest decline observed recently.
Official figures show a significant drop in the Naira’s value against the CFA franc, from N1/1.5CFA in the first quarter of 2023 to N1/0.37595CFA last week. Although there has been a slight improvement in recent days, the Naira’s status remains far below its previous standing in the sub-region.
This development has repercussions on the cost of imported goods into Nigeria through West African economies, leading to a slowdown in business activities along border towns in both Nigeria and Benin Republic.
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Money changers and transporters, including bike riders, now prefer payment in CFA francs, citing the risks associated with converting Naira back into CFA.
Traders, such as Achi Collins, note a significant shift away from accepting Naira, with many insisting on CFA francs for transactions.
The disparity in value between Naira and the strengthening CFA franc has rendered the former less desirable, especially within urban centers in the Benin Republic.
Various factors, including the performance of the United States Dollar, contribute to the depreciation of the Naira in neighboring countries, leaving Bureau De Change operators and other businesses helpless in mitigating its effects.
Overall, the waning acceptance of the Naira among trans-border traders underscores its diminished purchasing power and highlights the economic challenges facing Nigeria within the West African market region.
He further stated: “If you want to buy something here you will go and change your Naira to CFA before you buy whatever you want.’’
Until recently, the Naira held sway along the West African coast, stretching from Ivory Coast to Senegal.
Traders found it convenient to transact using Naira across various West African nations.
Nigerian sports journalists, covering events in Benin Republic, Togo, Ghana, Senegal, and Ivory Coast, freely utilized Naira in local markets. At that time, the Naira outshone the CFA Franc in strength.
However, those days are now a thing of the past as the Naira faces rejection in these very countries.
