Nigeria’s Economic Crisis: A neighbour’s Woes
LIKE a festering wound, commercial activities in the Republic of Benin is bleeding from the blow dealt on Nigeria by the economic downturn triggered by the global decline in crude oil prices and the collapse of the naira against other currencies. While before December 2015, 1000 CFA franc, the official currency of Benin Republic exchanged for N350, the value has since risen by 100 per cent with 1000 CFA francs now exchanging for N647. The result is that the price of imported items from food to automobile, which find their ways into Nigeria through the neighbouring country, have skyrocketed. The result is that much of the huge imports into Benin Republic, which depend on the huge Nigerian market for patronage, are no longer enjoying the necessary patronage. The situation has left traders in the neighbouring country lamenting, currency vendors are crying while auto dealers are bemoaning the fate foisted on them by grossly reduced patronage from Nigerians. Ramatou Hussein, a currency trader at Igolor Market, which overlooks the checkpoint of the Nigerian Customs Service at the Idiroko border in Ipokia Local Government Area, Ogun State, has not been a happy woman since the high exchange rate of the naira to the dollar left the Nigerian economy comatose. Sitting quietly in her makeshift office at the market, she lamented what she termed a reversal in her business fortune in recent times.
After initial hesitation to grant the reporter an audience, she finally obliged after some of her colleagues encouraged her to speak. ”Of what would my conversation with you be?” she queried. ”I have not made any sales or carried out a single transaction since morning.” ”Business has been very bad and we have been suffering since Nigeria enacted a new exchange rate for the dollar. The high exchange rate began with one dollar to N192 and later to N282. Now it is N313 to the dollar, which translates to an increase in the exchange rate of the CFA franc. “CFA 1000 used to exchange for N350. But that has risen to N647 to CFA1000. This has led to high inflation and diminished the purchasing power of Nigerians who patronise us and exchange the naira for the CFA when purchasing goods in Benin markets.” Still lamenting her fate, Hussein added: ”It is 12 pm already. Before now, by this time I would have made huge transactions and profit from Nigerians who come here to purchase goods, especially cars. But now, I have not made up to three transactions. I am just tired of the whole situation. “You should tell your government to have mercy on us by slowing down on their policies so that we can have a reprieve. The suffering here in Benin is too much.”
Many of Hussein’s frustrated colleagues and compatriots who occupied a row of makeshift stalls were seen in the scorching sun soliciting patronage from indifferent passers-by in smattering Yoruba. A trader, Iya Imoleayo, who operates a grocery shop in Igolor, told our correspondent that her business was no longer flourishing like it once did. She said: ”Nigerians no longer buy from us here. Cheap imported wines and provision items used to be the favourites of my Nigerian customers, but they have stopped coming here because the prices of the items have increased due to the new exchange rates of the naira to the dollar and the CFA. ”We are begging the Nigerian government not to send us out of business. The exchange rate of the naira to the dollar should be reversed to the old rate of N157 or N197 so that your people can continue to come here and buy from us.” The mood was the same with male frozen food sellers at the other end of the market. At their stalls, there were lots of haggling over price but low patronage. A male customer haggled as Marouf, a frozen food seller, tried fruitlessly to convince him to buy chicken from him. A few minutes later, the customer walked away from Moruf’s stall without buying anything. Our correspondent overheard the customer saying that the money on him could not accommodate the price called by Marouf.
Marouf later told our correspondent: ”Nigerians from Lagos and Ogun states are our customers, but they have stopped coming here to buy from us. The little sales we make are from those that live in the border communities. ”We learnt that Nigeria is currently battling with economic crisis, which has reduced the purchasing power and taste of the people, who now prefer fish to the chicken and turkey we sell here. The Nigerian government is killing our business and we pray that will change so our business can do well again. We depend on Nigerians for survival because they are big spenders.” At Igolor and Cotonou markets, a carton of Blanket brand of turkey (the brand commonly preferred by party-loving Nigerians), which used to sell for N6,500, now goes for N8,100, while other brands, which used to sell for N4,500 now goes for N6,500. Findings also revealed that a kilogramme of the special brand formerly sold for N500 now goes for N700, while the ordinary brand, which used to sell for N350 now costs 650.
A bag of rice (agric) in Benin Republic is now N10, 200 as against the former price of N5, 800. A bag of Caprice brand of rice, which used to cost N6,500 now costs N11,800, while the same quantity of Special rice sold for N8,000 now costs N12,500. The price of vegetable oil (Kings brand) has also risen from N6, 500 to N10, 500, while other brands formerly sold for N5, 500 now costs N9, 500.
Frustrated auto dealers
It is also not the best of times for traders at the Cotonou auto market. A number of the traders who are mostly nationals of Middle East countries, have lost a fortune due to low patronage by Nigerians in spite of a drop in prices of vehicles. Our correspondent who visited the market was shocked to hear that a number of the traders were contemplating relocation to their home countries following huge losses they have recorded from declining patronage occasioned by Nigeria’s economic crisis.
Some of them who spoke with our correspondent readily blamed their plight on President Muhammadu Buhari, calling him names for enacting economic policies they claimed had ruined their businesses. A resident of Cotonou, Anthony Soglo, said: “A number of car sellers here even want to sell their cars at give-away prices so they can relocate to their countries but Nigerian customers are no longer coming to buy from them as a result of the huge cost of ferrying the vehicles to Nigeria. Despite the fact that the prices have been reduced, customers from your country (Nigeria) are not just coming here to buy cars anymore. ”This is because by the time you buy the car at a cheaper price, the multiplying effect of high exchange rate of CFA to naira would frustrate you from taking it to Nigeria. For example, the price of a Golf 4 car was formerly N600, 000. But it is now N1million because of the new exchange rate.”
The situation, according to investigation, has led to rise in crime rate in the border communities as smugglers and potters who mostly flocked the markets have been forced out of jobs. There have been pockets of robbery recorded in the communities as jobless youths unleash their frustrations on innocent residents in parts of Igolor and Idiroko, a Nigerian community bordering the Republic of Benin. Ade Olawale, a Customs-licensed agent, said: “Innocent residents are the ones suffering the more because jobless youths have turned their anger on people in the neighbourhoods of Igolor, in the Republic of Benin and Idiroko in Nigeria. ”A few weeks ago, a couple was attacked by armed youths in Idiroko shortly after they held a naming ceremony for their new child. The hoodlums collected money, phones and jewellery from the couple after they had threatened to kill their new baby if they refused to release their belongings. ” There have also been reports of Nigerian students studying in Benin universities but living in Igolor and Banigbe being dispossessed of their personal effects by hoodlums lately. This may not stop unless there is improvement in the economic situation of Nigeria which has affected the Beninese commercial activities because the francophone country depends on Nigeria for her economic survival.”
Some Nigerian students studying in the Republic of Benin, who spoke with The Nation, disclosed that the biting effect of Nigeria’s economy on Benin has forced many of them to drop out of school and relocate to Nigeria. A cross-section of them, who did not want their names in print, said those of them who could no longer cope with the situation had been doing menial jobs to complement the allowances they got from their parents. A female student who asked not to be named said: ”Some of us have been doing odd jobs to survive because we cannot continue to disturb our parents who are already paying through their noses for additional money to take care of our living expenses. ”Many of us even sneaked into Nigeria to attend the recent annual convention of the Redeemed Christian Church of God (RCCG) held at the Redemption Camp along Lagos-Ibadan Expressway where we sold sundry items including souvenirs, anointing oil, among others.” She added: ”Worst hit are medical students because of their high tuition. There have been a reduction in their number as some have returned to Nigeria because their parents could no longer afford their studies as a result of the huge cost of foreign exchange.”