To cope with a worsening dollar shortage over the last year, Nigeria’s Central Bank has proposed a number of controversial policies. One of those has been suspending the use of local currency denominated debit cards for international transactions.
For local businesses, the effect of the policy has been tough. Unable to pay for raw materials and imports with local currency denominated cards, they’re forced to purchase dollars at a steep price on the parallel market. Jet-setting Nigerians have also had vacation and shopping trips disrupted. But, a silver lining is starting to emerge.
Faced with losing subscribers in Africa’s largest economy, some of the world’s biggest tech companies are beginning to charge for services in naira, Nigeria’s local currency, rather than US dollars. Over the past month, Apple subscribers have taken to social media to complain about being unable to pay for the company’s services.
As a result, Apple has announced that it will start charging subscribers for its various services in naira, the local currency. In an email, Apple told subscribers “the currency of the App Store, the iTunes Store, and Apple Music in Nigeria will soon be changing from U.S. dollars to Nigerian naira.” Following the currency change, Apple said, “pre-orders or subscriptions” will be billed in naira.
Before Apple, Facebook had also adopted a similar tact. The social networking site started charging for ad campaigns in naira back in June, as the currency situation got worse. Nigeria, with more users than anywhere else on the continent, represents an important market for Facebook. Google started accepting naira payments for apps and games in its Play Store in Aug. 2015, just as the forex problems started to bite initially. But Google still requires Nigerian business users of its AdSense and AdWords services to pay in dollars.
For months, Nigeria has battled a forex crisis triggered mainly the drop in the price of oil, its main export. With government revenues plummeting, the value of Nigeria’s naira has crashed for much of the past year. While initially putting a fixed exchange rate in place to peg the value of the naira against the dollar, a devaluation of the currency in June has resulted in a steep drop in value, making it more expensive and difficult for Nigerians to get hold of scarce dollars.