With the rising scarcity foreign exchange manufacturers have expressed fear many businesses will die before the end of the year.
Accoring to Paul Odunaiya, round 80 per cent of the materials that go into his Lagos-based diaper and sanitary towel manufacturering company, Wemy’s products are imported.
“To buy them, we need dollars, which we can no longer longer find. “We’re pleading with our suppliers to wait a bit longer so that we can source dollars and pay them,” Odunaiya told Reuters.
With the price of oil, Nigeria’s main export, depressed and foreign exchange reserves dwindling, its central bank is hanging on to its dollars to support the local naira – leaving a dwindling supply of hard currency to buy the imports that are the bedrock of Africa’s largest economy.
Muda Yusuf, director general of the Lagos Chamber of Commerce, said that, like Odunaiya, the dollar shortage is hitting most of its 2,000 members hard. “If the situation persists it will lead to lay-offs,” he said. “If you are not producing, there will be a shortage of goods in the market, prices will go up.”
Inflation has risen for 10 straight months, hitting a two-year high of 12.56 per cent in June, piling on greater economic hardship for a population of whom 40 per cent already live below the official poverty line of N137,430 ($382) per year.