Effects of the naira devaluation and spike in foreign exchange (forex) are currently biting hard in shops in Dubai, the United Arab Emirates, (UAE), the favourite shopping centre for many Nigerians and other nationals around the world.
The popular Dubai Mall, in the heart of the city, recounted that patronage from high-spending Nigerians had dropped in the last couple of months.
A visit to the mall at the weekend showed that some shops are currently selling at 20 to 50 per cent discounts. Some are, however, worried that their offers are still not drawing the Nigerian customers as it used to in the past.
The development, it was learnt is for reasons not unconnected with the economic recession, weakening of the Naira against the dollar, and worst still, the inability of bulk and luxury goods traders to access dollars at interbank market rate.
For instance, ALDO store in the Dubai Mall, currently sells shoes, bags, jewellery, wrist watches among others at 20 to 40 per cent discount. But to the surprise of an attendant, Aisha, a Pakistani, “some of our customers are still not coming.”
She said: “There are sales here every day but Nigerians are not coming around. We love Nigerians. They buy plenty from here during promo sales. In one week of promo sales, we would have finished the old stock. But this time, we have not seen them. Please, tell them to come.”
The Guardian learnt that the landing cost of some luxury goods like bags, shoes, jewellery (from the Souk), fabrics, perfumes, cosmetics and electronics have more than doubled in prices since the Central Bank of Nigeria’s (CBN) flexible foreign exchange policy was introduced in June.
For instance, a simple sandal at ALDO, after 30 per cent discount, costs 171Dirhams (DH), that is, $46 or N20, 700. Same item at Deira open market was priced for 100DH ($27.4 or N12,329). Similarly, a simple male adult canvass was offered at 40 per cent discount for 147DH, $40 or N18,123., while a female hand bag sells for 260DH $71 or N31,950 at the mall.
A Nigerian, Eniola Bakare, in company of her husband, was seen touring the Dubai Mall. Bakare told The Guardian that it is almost “senseless” to buy anything from the shop and think of selling same in Nigeria at this time.She said: “These are goods I used to buy from Dubai, United Kingdom and China. But I dare not try them now. The prices, when convert to Naira are just beyond what the rich will accept from you. It is not that they increased the prices in Dubai, but our own currency is the problem. It is weak and almost useless for this trade.”
The couple left the mall empty handed after about three hours of window shopping.Bakare said: “All we are left with in Dubai is the wonderful experience on the Emirates Airplane, site-seeing of skyscrapers, visit to Burj Khalifa, and dune drive in the desert, tour IMG World of Adventure and return to Lagos with nothing; so sad.”
According to reports, the bilateral trade volume between Nigeria and UAE was in the neighbourhood of $1 billion in the first quarter of 2015. But the volume had dropped significantly by at least $100 million as at second quarter of this year.
Dubai attracts 13.2 million visitors yearly, of which over 300,000 are Nigerians out of the 500,000 from Africa. While 60 per cent of the Nigerian visitors were holiday makers, about 30 per cent are for business. The rest are for education and healthcare and a host of others.
But the recession has cut the number of Nigerian visitors has decreased by one-third in the last couple of months.Despite the recession and associated challenges including dollar scarcity, there are some Nigerians that would still buy from Dubai by all means.
One of these few lot is a popular Nollywood actress, who also owns a beauty shop in Lagos. Two days of queuing at Travelex outlet at the Murtala Muhammed International Airport (MMIA), Lagos, could only earn her $4000. Compared to the black market, the outlet offers dollar at about the interbank rate (N380 to $1).
The actress told The Guardian that it was becoming more difficult to get dollars for use overseas. “I needed to shop for some beauty creams in Dubai, United States and China, ahead of the festive season but the dollar is just not there. The maximum offered at Travelex is $2000 a day. That is why I delayed my flight till the following day. It is useless to travel without the needed currency,” she said, preferring to remain anonymous.