Business activities at Nigerian borders have dropped by 80 percent due to the depreciating Nigerian currency.

Licensed customs agents at the borders said the plunge in the Naira’s exchange rate to the CFA franc is the reason for the declining business activities at the nation’s borders.

In the last three years, the Nigerian Naira has dropped from N300 for 1,000 CFA francs to N2,660 for 1,000 CFA francs.

According to Ogonnanya Godson, Vice Chairman of the National Association of Government Approved Freight Forwarders, Seme Chapter, business activities at the border began declining in 2021.

“The Cotonou CFA franc is now N2,660 for 1,000 CFA francs. It started increasing from N300 for 1,000 CFA francs three years ago until it reached its current level, which is affecting our businesses. The rate at which the exchange rate has been increasing since 2023 is alarming,” Godson stated.

He further noted that some importers have begun boycotting the borders, especially Seme, due to the exchange rate.

“Importers no longer patronize these areas because, after clearing and paying for everything, they end up losing. So activities have dropped by between 70 to 80 percent, and the exchange rate of the dollar is also affecting this area.

“The volume of activities here is now between 22 to 30 percent. This applies to other borders as well because of the exchange rate,” he stated.

Lasisi Fanu, a former Seme Chapter Chairman of the Association of Nigerian Licensed Customs Agents, corroborated Godson’s statements and admitted that activities at the border have declined.

“That is the simple truth and fact about the situation. You can’t get anything less than what you’ve been told about the drop in activities at the borders. Every day, the CFA franc appreciates while the Naira depreciates.

“Today, I was informed that the CFA franc has increased to between N2,650 and N2,700 for 1,000 CFA francs. This began three years ago and has worsened since 2023,” Fanu stated.

Fanu explained that the Naira’s depreciation against the CFA franc is similar to its depreciation against the US Dollar.

“Whatever 1,000 CFA francs could buy in the Republic of Benin two years ago, it still buys the same amount now. It’s the Naira that is depreciating.

“That’s the reason there is no business. The people who used to go to Cotonou for business said there is no more business because their customers there have said they can no longer trade due to the high exchange rate against the Naira,” he explained.

Dangote Oil Refinery, the largest in Africa, has set its sights on capturing Nigeria’s $267.7 million polypropylene market starting next month, Aliko Dangote, president of the group said, as its largest oil and gas project edges closer to full operational status.

The refinery, part of the vast Dangote Industries conglomerate, is expected to reduce Nigeria’s reliance on imported polypropylene—a crucial raw material in various industries, including packaging, textiles, and automotive parts.

“Let me assure you of one thing, Nigeria from October will not import any more polypropylene, which used to be about a quarter of a million tons,” he said. “No more imports of polypropylene.”

Polypropylene, a versatile plastic used in a wide range of applications from packaging and textiles to automotive parts and medical equipment, is currently imported in large quantities by Nigerian manufacturers.

Annual polypropylene import into Nigeria is estimated at $267.7 million, according to TradeMap, which peaked at $407 million in 2022.

The latest data by the National Bureau of Statistics (NBS) revealed that the country brought in the product valued at N99.6 billion in the first quarter (Q1) of this year, placing it at number 12 on the top 15 products imported by Nigeria from the rest of the world.

“We will satisfy the market 100 percent,” said Dangote. “This is so because these industries that are struggling and having to go and look for FX that they will not get and still have to keep stock for four or five months because it’s not easy shipping, clearing, and whatever, can buy as they need.”

He noted that the refinery is determined to do this because it will reduce the cost of importation and scramble for foreign exchange.

“We are also in the business. And our demand also as Dangote is huge. We have Dangote Packaging and are one of the biggest demand users of polypropylene,” he added.

Saudi Arabia, South Africa, South Korea, China, and Vietnam were the top importers of polypropylene into Nigeria in the first quarter of 2024, covering 90 percent of Nigeria’s demand.

Polypropylene is a versatile plastic used in a wide range of packaging applications. It’s often preferred over materials like cellophane, metal, and paper due to its flexibility, durability, and cost-effectiveness.

It is used in food and confectionery, tobacco, and clothing industries in flexible form while in rigid form, polypropylene can be found in caps, closures, pallets, crates, bottles, JIT storage solutions, and containers for products like condiments, detergents, toiletries, and yogurt.

Polypropylene’s versatility and benefits make it a popular choice for packaging across many industries.

“The polypropylene market is growing rapidly owing to the rising demand from the packaging industry. This high demand is associated with the increasing consumption of packaged food and beverages,” said Fortune Business Insights, a research firm.

“It also helps in reducing the possibility of food deterioration and quality loss.”

Nigeria’s Company Income Tax (CIT) surged by 150.83% to N2.47 trillion in Q2 of 2024, from N984.61 billion in Q1 2024, the National Bureau of Statistics has reported.

On a year-on-year basis, the CIT went up by 59.52% from N1.55 trillion in Q2 2023.

On a quarter-on-quarter basis, the NBS reported a growth rate of 150.83% from N984.61 billion in Q1 2024.

“Local payments received were N1.35 trillion, while foreign CIT payment contributed N1.12 trillion in Q2 2024,” the report shows.

“On a quarter-on-quarter basis agriculture, forestry and fishing recorded the highest growth rate with 474.50%, followed by financial and insurance activities and manufacturing with 429.76% and 414.15 respectively.

“On the other hand, activities of households as employers, undifferentiated goods- and services-producing activities of households for own use had the lowest growth rate with –30.22% followed by activities of extraterritorial organisations and bodies with –15.67%.

“In terms of sectoral contributions, the top three largest shares in Q2 2024 were Financial and insurance activities with 15.53%; manufacturing with 8.99%; and Information and communication with 7.84%.

“Nevertheless, the activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.00%, followed by water supply, sewage, waste management, and remediation activities with 0.02% and activities of extraterritorial organisations and bodies with 0.03%.”