Nigeria’s manufacturers seek easy access to dollars from CBN to pay for imports
The Manufacturers Association of Nigeria (MAN) has asked the Central Bank of Nigeria (CBN) to ease access to foreign exchange to enable its members pay for raw materials and machinery need for production.
MAN in a report released on Thursday said that difficulties in accessing dollars to pay for imports are the biggest challenge currently faced by local manufacturers and businesses in Nigeria.
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, MAN said in the report.
Dollar liquidity dried up in Africa’s biggest crude producer after oil prices plunged following the coronavirus pandemic.
Crude exports account for about 90 percent 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 trade group.
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.
~With Bloomberg report