Nigeria’s land border communities are now carrying out their cash transactions in CFA franc – a currency used by francophone countries in West and Central Africa, following the persistent scarcity of the naira in the country.
Farmers and traders in Mfum, Gurin, and Illela border communities in Cross River, Taraba, and Sokoto states, respectively, told BusinessDay that the scarcity of the redesigned naira notes has compelled them to switch to the CFA franc, which is easily available.
“We usually trade in both currencies before now, but the scarcity of the new naira notes in our communities has forced us to trade more in the CFA franc,” Sayina Rima, said from his cocoa farm in Ikom.
“When the new notes become available traders and farmers would simply change their CFA francs to naira,” Rima who is the former cocoa association national president said.
He noted that many farmers and traders are operating informal businesses and are excluded from the country’s financial system.
According to him, changing the old notes to the new notes in most border communities would require time as banks are located far away.
The World Bank’s 2021 global findex report showed that Nigeria’s banked population increased by 15.6 percentage points to 45.3 percent.
Read also: Naira redesign: Emefiele says banks will accept old naira after deadline
This implies that almost 56 percent of Nigerians are unbanked and they are mostly in rural communities and are heavily involved in the agricultural sector.
Shehu Malari, a beans farmer in Gurin, a border community in Adamawa State said that trade has to continue whether there is a scarcity of naira on not.
He noted that traders have increased trading in CFA franc as it is easily available, noting that naira is still accepted but has to be the new notes.
“If the new notes are scarce in the cities then you can imagine what the situation will be in border communities,” Malari said.
Also, in a tweet, Sani Ahmad Kaitafi shared images of traders trading in CFA francs. He noted that both the Illella border in Sokoto and the Konni town in the Niger Republic have always carried out transactions in both naira and CFA franc currencies. He added that the scarcity of the new notes has increased the volume of transactions in CFA franc and reduced the volume in naira transactions.
The redesigned naira notes comprising N200, N500, and N1000, became legal tender on December 15, 2022. The Central Bank of Nigeria had earlier fixed January 31 as the deadline for the collection of old naira notes, but later extended the time limit to February 10th.
Despite the extension, most Automated Teller Machines in major cities across the country have been empty as scarcity of both the old and new notes persists.
The situation has left many Nigerians stranded and frustrated as they spend hours in long queues in banks to make withdrawals. As of the time of writing, N1 is exchanged for CFA franc 1.31 at the official rate.