Devaluation of the Nigerian currency, the naira, took effect on 20 June 2016. This monetary adjustment by the authorities of the leading economy on the African continent, which shares a border of around 1500 km with Cameroon, should have repercussions on commercial trade between these two countries.
Already crowned with the status of 2nd supplier to Cameroon behind China, according to the Ministry of Finance Department of Economic Affairs’ statistics; Nigeria provided 13.8 and 17.9% of Cameroonian imports in 2013 and 2014 (against 14.2 and 18% for China), should see its position strengthened in the coming months, according to experts.
“On the commercial level, the naira devaluation could result in the growth of imports of Nigerian products by neighbouring countries like Cameroon“, the economist Henri Ngoa Tabi, lecturer in the Faculty of Economic Sciences and Management at the University of Yaounde II-Soa, explained to the government daily paper. Indeed, he explains, since the “devaluation reduces the price of Nigerian exported goods in foreign currency“, their “competitiveness in price in foreign countries strengthens and their consumption by foreigners grows. Exports grow“.
On the other hand, maintains the same source, because of this devaluation of the Nigerian currency, “exports from neighbouring countries like Cameroon could decrease in volume, as their cost becomes higher”. While hastening to state that these “effects on volume are not immediate“, Henri Ngoa Tabi remarks that in similar circumstances, “foreign exports, when faced with an unfavorable devaluation, simply reduce their margin (price in foreign currency) in such a way as to maintain the price in naira unchanged. Competiveness of these goods will therefore not be affected“.