By Gbenga Adedayo
As dollar scarcity persists, Nigerian manufacturers have listed difficulties in accessing dollars to pay for imports as their biggest challenge in a report prepared by an association that represents their interest.
Producers still find it “extremely difficult” to source foreign exchange for importation of raw materials and machinery even after the central bank started selling the greenback to bureau de change operators and banks in the fourth quarter of last year in a bid to improve access, the Manufacturers Association of Nigeria, or MAN, said in emailed report on Thursday.
Dollar liquidity dried up in Africa’s biggest crude producer after oil prices plunged following the coronavirus pandemic. Crude exports account for about 90% of foreign-exchange earnings in the West African nation. Authorities devalued the local unit twice last year to deal with the pressure even as the economy contracted in the third quarter.
Manufacturers asked that the government to give them priority in the allocation of dollars and also offer the U.S. currency to firms at a “concessional” rate to ease their burden, according to the union. They also want the central bank to “fast-track” the move toward a single exchange rate to ensure transparency in the market.
Besides the dollar shortage, the producers say high electricity and transportation costs as well as low consumer purchasing power are the other challenges they are facing.
-Bloomberg