The devaluation of the Naira has had a positive impact on the exportation of Nigeria’s local products to neighboring countries in West Africa.
This is according to Comptroller Timi Bomodi, the Customs Area Controller of the Seme Command, who made this known in an interview with the News Agency of Nigeria (NAN) in Seme, near Badagry.
Bomodi explained that market forces, including demand and supply, significantly influence imports and exports. One of the critical factors is the exchange rate, which affects purchasing power.
What he said
“The exchange rate plays a big role in determining the demand or the purchasing power of the people,” Bomodi stated. “As the value of the Naira declines, Nigerian-made goods become cheaper within the region. This encourages people from neighboring countries to purchase goods from Nigeria. While we often lament that the exchange rate negatively impacts imports, it positively affects exports.”
He elaborated that the high dollar rate made it difficult for Nigerians to buy goods, but the cheaper Naira presented an opportunity for neighboring countries to import goods from Nigeria. “For the first time, Nigeria has a net export gain vis-à-vis her neighboring countries. What used to drive Nigerians to other countries is now drawing them to Nigeria,” he noted.
The Customs Controller also highlighted that the devaluation of the Naira has bolstered the local economy. “A devalued Naira is advantageous for export. It’s not entirely negative; in trade, you must balance both ends,” Bomodi said.
What to know
At the Seme-Krake border post, where Bomodi oversees operations, the primary responsibility of Customs is to facilitate legitimate trade. This includes managing a substantial volume of imports and exports and enforcing government fiscal policies, particularly in areas of prohibition.
Bomodi emphasized the strategic importance of the Lagos-Abidjan corridor, which is considered the most viable trade route in West Africa and possibly the entire continent. “The corridor is so strategic to Africa’s economic development that the European Union and other international agencies are willing to invest significant funds to develop infrastructure around this axis,” he explained.
The Seme Command’s role in promoting trade within this corridor underscores the broader economic benefits of the Naira’s devaluation.
As neighbouring countries increasingly seek Nigerian goods, the local manufacturing sector gains momentum, potentially leading to broader economic growth and development.
The positive export trends observed by the Seme Command reflect a nuanced understanding of currency devaluation’s role in international trade, highlighting both challenges and opportunities for Nigeria’s economy.
