Trans-border traders are facing a new challenge as the depreciation of the Nigerian currency, the Naira, has led to its rejection by traders across the West African market region.
Previously, the Naira was widely accepted due to the significant trade volume between Nigeria and neighboring countries. However, recent findings indicate a shift in preference towards other currencies such as the CFA or the domestic currencies of non-francophone nations.
Traders, including Nigerians, expressed concerns over the continuous depreciation of the Naira, which has made holding onto it increasingly risky. Official reports reveal a significant decline in the value of the Naira against the CFA Franc, with rates plummeting to new lows in recent months.
This downward trend has prompted traders to hedge against further depreciation and seek alternative currencies.
The rejection of the Naira has disrupted business activities on both sides of the border, impacting the cost of imported goods and leading to a slowdown in trade.
Money changers and transporters alike are opting for more stable currencies like the CFA, citing the uncertainty surrounding the Naira’s value. Even in border towns like Seme, where the Naira was previously accepted, its use is dwindling due to its diminished purchasing power.
Factors contributing to the Naira’s depreciation include the rising cost of the United States Dollar, which influences exchange rates across the region. This trend has resulted in a loss of confidence in the Naira and a preference for more stable currencies among traders.
Consequently, traders now require customers to convert Naira to CFA before accepting payment for goods and services.
The rejection of the Naira marks a significant shift from previous years when it was widely accepted in West African countries. However, its loss of value has led to its exclusion from regional trade transactions, impacting both Nigerian traders and their counterparts across the border.
As the Naira continues to depreciate, traders must adapt to new currency dynamics to navigate the evolving economic landscape of the region.
