The West African currency, the CFA franc, crashed against the naira, reaching a new historical record on the free market, trading at 5680 CFA francs for N1000 due to the closure of Nigeria’s land borders.
The country’s borders in four regions were closed following a directive from the Office of the National Security Advisor (NSA) due to the state of insecurity in the country. Currently, the CFA franc fell on the free market from 6890 before closing to a new record of 5680, and the price per bag of a 50 kg bag of rice sold between 10,000 and 11,500 pesos fell further between N8000 and N9000 depending on the brand. The opposite is true in Nigeria, however, as the investigation showed that, while smuggling of rice across land borders has indeed been reduced, it has forced the market price of the commodity to rise from 14,000 to 18,000 to 19,000 naira per bag.
As a result, smuggling by waterways has never been more attractive, as smugglers understand that the Nigerian navy is the only force they face, but whose main concerns are preventing brutal theft and seizing adulterated diesels, rather than smuggling rice. However, economic and financial experts are divided on the outlook for the naira for the rest of the year; many said that the local currency could still appreciate in the coming months if the country’s borders remained closed beyond the 28 days provided for in the code of the current joint exercise called “Exercise Swift Response”.
In addition, according to a source from the exchange office, the new operators were surprised by the new development. The Nigerian Customs Service (NCS) exercise, with the backup of the designated security working group, resulted in a tight closure of the border and smuggling, forcing smugglers to go to sea.
Sources : All Africa, dailytrust.com.ng