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The Naira’s depreciation over recent months has led to significant setbacks in the West African market, with trans-border traders increasingly rejecting the Nigerian currency in favor of the CFA or other local currencies of non-francophone countries.
Investigations by Vanguard at the Seme border reveal a shift in currency preference among traders, marking a departure from the era when the Naira dominated the sub-regional economy. Historically, the Naira was the preferred medium of exchange due to Nigeria’s substantial trade volume with neighboring countries. However, the currency’s status has been in decline since February, culminating in its outright rejection by March 2024. Traders, including Nigerians, express concerns over the Naira’s falling value, with the worst depreciation rates recorded in the recent months. Official figures show a steep decline in the Naira’s value against the CFA, dropping from N1/1.5CFA in early 2023 to N1/0.37595CFA recently. Despite a slight improvement, the Naira remains far from its former strength, impacting the cost of goods imported into Nigeria and slowing business activity in border towns of Nigeria and the Benin Republic. On-ground reports from Benin-Nigeria border markets indicate a dwindling presence of the Nigerian currency, with money changers and transport operators opting for the CFA to avoid losses due to the Naira’s instability. Ibrahim Yakubu, a bike rider, and Taiye Ekiti, a money changer, voiced their preference for the CFA over the Naira, attributing the shift to the dollar’s influence on the Naira’s depreciation. Traders like Mr. Achi Collins, dealing in second-hand clothing, note the reluctance of their counterparts to accept the Naira, forcing customers to exchange their money to CFA. Although a few traders in Seme may still accept Naira, the exchange rate’s impact is reflected in higher prices for goods. The rejection of the Naira in major cities of the Benin Republic further underscores the currency’s diminished value, with traders insisting on CFA for transactions. Before now, Naira was accepted on the west coast, up to Ivory Coast and Senegal. Traders freely spent Naira in many countries of West Africa. Nigerian sports journalists who covered sports events in Benin Republic, Togo, Ghana, Senegal and Ivory Coast spent Naira in the markets of these countries. Naira was stronger than CFA then. Those days are gone. The naira is now rejected in these countries.
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