Why Francophone, Other Countries Gang Up Against Use Of Naira In Trans-Border Trade;  FG Moves To Stabilize Local Currency

By Elizabeth Chukwuma

  Former President Muhammadu Buhari, may have left office with his wrong monetary and Fiscal policies that had exposed the weakness of the naira to the North American country of the United States dollar and other world major currencies at both the Autonomous Foreign Exchange Rate Market, AFEM and the  Parallel, popular, Black Market Exchange  Rate Market.

The situation appears to have become worrying as the one- time most used south currency in the neighbouring West African countries of Republic of Benin Republic, Niger including Ghana, Togo, Cote de’ Ivoire and Senegal, markets being the only fully  convertible currency  in in the region  appears no longer acceptable in these countries, particular, the  Francophone countries which have ganged up to further kill the naira usage and promote the use of the CFA , on the excuse that the naira has depreciated in value at both the official and Parallel Exchange Rate Markets.

The situation at the Illela, Jibiya, Kamba, Seme, Idiroko and other border communities between Nigeria and Niger, Benin, speaks volume. Until President Bola Ahmed tinubu, who incidentally was a former governor of Lagos state took the bold economic decision to stabilize the value of the naira and still make it the most acceptable currency in the West African sub-region, cross border traders opted for the use of CFA, in payments instead of the naira .

Rejected by Trans-Border Traders

A  top security operative  confirmed that   at the border Community markets in Nigeria, Benin, Niger, Mali Chad and the Central African countryCameroun, many of the money changers  or Bureau de Change Operators, at present  no longer display  the Nigerian currency, naira  on their board as was the case under former Presidents Olusegun Obasanjo and Goodluck Jonathan’s Administrations . 

Notwithstanding, the Francophone and the other West African countries economic gang up to make a mockery of he use of the naira, in the sub-region,  the Nigerian President who could not hide his feelings  had told those that cares to listen that ‘’a stronger naira  will be achieved in the first quarter  of 2025 in the West African sub-region   following the recent policy interventions  by Olayemi Michael Cardoso led  the Central Bank of Nigeria, CBN, in the country’s Foreign Exchange Market and the resumption of full operations of the $19 billion Dangote and Port Harcourt refineries.

 Recall that Babatunde Fashola, a former governor of Lagos state and former minister of Works during Buhari’s Administration had said that  ”lack of critical  infrastructure  like  a petroleum refinery” was what had accounted for about   30% of the country’s forex demand  which was killing the naira.

He had declared hat  ”if there is a reduced  demand  of forex  to 10% from the current 30% for importation of Premium Motor Spirit, PMS, popular, petrol,  particular, it  will reduce the pressure on the naira at both the AFEM and Parallel foreign exchange  rate markets.  

 He had given an insight to the government latest Infratructure Master Plan, 2020 -2043, estimated at about $ 2.3 trillion , to be completed over the  next 20 years , on the average of $10 billion ,annually,currently being implemented by the Nigerian National Petroleum Company , NNPCL, which has Mele Kolo Kyari, as the Managing DirectorThe former minister noted that if Petrol and other petroleum products like Atomotive Gs Oil, AGO, popular, diesel, Aviation Turbine Kerosene,  and Dual Purpose Kerosene , DPK, including cooking gas  are local produced, it will guarantee some cost reductions  such as shipping , insurance, and payment of otrageous port charges that would be channelled to the provision of basic infrastructural , educational and health facilities , which are currently in short supply and repair of dilapidated roads across the country.

Kyari: MD,NNPCL

 This may have informed why the NNPCL, Chief Executive Officer, CEO, has given President Tinubu a, cause to cheer   when he volunteered information of the company’s move to stabilize the naira by boosting its gas production and sales in new markets to earn Forex. The NNCL boss was said to have told the Nigerian President of their determination   in delivering gas to both the domestic and international markets.

The NNPCL Managing Director   had declared  that the Company  will ‘’leverage   on the favourable  international  market prices  for oil and gas  to booster the naira’s value in next coming months  in line with the various circulars and directives of the apex Bank.  

As a prelude to ensuring the supply of gas to the international Community with ease,  Kyari, the NNPCL,   helmsman had reportedly said that  the Final Investment Decision  , FID, on the $25 billion  Nigeria-Morocco,  Gas Pipeline , NMGP,  will be taken  in December , 2024. He had said that the Gas pipeline project will pass through 13 African countries to German, Spain and other European countrieswhich are the target markets of the Nigerian gas production.  

In spite of the fact that Nigeria is still on the second quarter of 2024, and has not started generating Forex from its projected incresed gas production,  Goldman Sachs Group Incorporated, an Investment Bank, had said that Nigeria is on track as ”the naira has remained the best world performing currency” in this month of April as it rallied 12% against the US dollar at the forex markets.

Sach, the United States born economist had predicted that the American dollar would fall further below the projected N1,200.00, which  confirms what the Maritime analysts had said that that the Cross Border Traders who had rejected the use of the naira  due to depreciating value at the forex market will return back to use the Nigerian local currency for sub-regional transactions as it rebounds.

Data from the official trading platform of the FMDQ, Securities Exchange, that oversees the,   AFEM, had revealed that the naira traded  N1,125.55 to the US, dollar, on Friday, April 13, 202,   as against N1, 230.61 the ,  on Monday, April 8, 202.At the Investors and Exporters , I&7E, window, the naira  had traded  between N1,486.00 and N1,300.00 against the American dollar.  

 Economic experts   had said that the fiscal and monetary policies initiated by the government and currently being implemented by the CBN,   has helped in tackling the country’s dollar scarcity,  reduced volatility and decreased reliance  on the parallel forex markets.

rEwane: Naira appreciation sustainable

Bimark Rewane, an ace  policy analyst  and CEO, Financial Derivatives Company  Limited, may have sent a message to Nigerian Trans Border Traders that there is nothing to worry  about the naira , as  ”there are better days ahead for the Local currency”.

 He had said that the naira trading at N1,410.00  to one US dollar  at the Parallel  Market and N1,75.00 at the AFEM , in recent months  means that the  appreciation  of the naira  against world major currencies  in the  coming months is sustainable, noting  that ”the naira is beginning to limp out of   the doldrums,  and offering hope to the skepticals’’ .He had reportedly said that there had been too much pressure on the naira over the years as’’ there was lot of waste, leakage and mismanagement of things in government’’.    

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