NAIRA DEPRECIATION SPURS PREFERENCE FOR CFA AMONG TRANS-BORDER TRADERS

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The depreciation of the Naira in recent months has prompted a shift in currency preference among trans-border traders, with many opting for the CFA or other local currencies of non-francophone countries over the Nigerian currency.

At the Seme border, investigations reveal a notable change in traders’ currency choices, signalling a departure from the period when the Naira dominated transactions in the sub-regional economy.

Historically, the Naira held sway as the preferred medium of exchange due to Nigeria’s substantial trade volume with neighbouring countries. However, the declining value of the Naira, particularly evident since February, has led to its outright rejection by traders by March 2024. Concerns over the Naira’s diminishing value are palpable among traders, including Nigerians, as depreciation rates have worsened in recent months.

Official figures demonstrate a sharp decline in the Naira’s value against the CFA, plummeting from N1/1.5CFA in early 2023 to N1/0.37595CFA recently. Trans-border traders cite the Naira’s dwindling value as the primary reason for their shifting preference towards other currencies, indicating the significant impact of currency depreciation on cross-border trade dynamics.

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