The sharp depreciation of the Nigerian naira in 2024, as highlighted by the World Bank’s Africa Pulse Report, is making Nigerian imports cheaper for Ghanaian traders.
With the naira losing over 40% of its value, Ghanaian traders are taking advantage of the favourable exchange rate to increase trade with Nigerian suppliers. Items that previously cost ₦1,000 now require fewer cedis, making imports from Nigeria more affordable.
It has even become more profitable for the trader to travel to Nigeria bypassing Togo, which had previously been the preferred destination for the same items they now buy from Nigeria.
Some of the traders are reporting increased value when sending amounts as low as GH¢500 to Nigerian suppliers. In some cases, currency fluctuations have even resulted in refunds with higher amounts, turning exchange rate shifts into profitable opportunities.
The naira’s depreciation is primarily driven by high demand for US dollars in the parallel market, limited dollar inflows, and slow disbursements from the Central Bank of Nigeria. While this situation challenges the Nigerian economy, it provides Ghanaian traders with cost savings and higher profit margins on goods sourced from Nigeria.
Ethiopia, Ghana, and Nigeria have seen their currencies weaken significantly due to increasing demand for foreign exchange. By the end of August 2024, the Ethiopian birr, Nigerian naira, and South Sudanese pound were the worst hit.
