Forex Crisis Crashes Border Trade by 80%
Licensed customs agents operating at the nation’s land borders have blamed the foreign exchange crisis in Nigeria for the 80 per cent drop in trade activities at the borders.
They said that in the last three years, the value of CFA franc to naira had moved from N300 for 1000 CFA franc to N2660 for the same 1000 CFA franc.
In a telephone conversation in Lagos on Monday, the Vice Chairman of the National Association of Government Approved Freight Forwarders, Seme Chapter, Ogonnanya Godson, reiterated that trade activities at the border started dropping since 2021.
“Cotonou CFA franc is now N2,660 to N1000 CFA franc. It started increasing from 3000 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.
According to him, importers have started boycotting the borders especially Seme because of the constant depreciation of naira 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 per cent 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.
Corroborating what Godson said, a former Seme Chapter Chairman of the Association of Nigerian Licensed Customs Agents, Lasisi Fanu, admitted that activities at the border had dropped.
“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.
According to Fanu, the more the dollar appreciates and the naira depreciates, the same way the CFA franc appreciates against the naira.
“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 trade again because the exchange rate against the naira is too high,” he explained.
A former ANLCA Chairman, Idiroko Chapter, Mr Abel Ayokunle, stated that aside from people bringing in raw agricultural goods into the country, the exchange rate is frustrating every other importer at the border post.
“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.
It was reported in June 2023 that the Central Bank of Nigeria had directed Deposit Money Banks to remove the rate cap on the naira at the official Investors and Exporters’ Window of the foreign exchange market, to allow for a free float of the national currency against the dollar and other global currencies.
This came barely two weeks after President Bola Tinubu promised to unify the nation’s multiple exchange rates, and less than a week before the suspension and detention of former CBN Governor Godwin Emefiele, whose unorthodox monetary policies became a stumbling block to investors and the economy.
This move by the apex bank which led to the continuous drop in the value of the naira against the dollar met strong criticisms from economists and other stakeholders in the country.
