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A Nigerian manufacturers group says members can’t access dollars as the impact of the coronavirus pandemic and fall in oil prices have cut the flow of foreign currency to Africa’s top oil nation.
“It was pretty difficult to source forex from all the available windows,” the Manufacturers Association of Nigeria, or MAN, said in a report published over the weekend. Members have had problems accessing foreign currencies for five weeks in part due to lack of central bank’s interventions, the manufacturers group said.
There is an estimated $1 billion backlog of unmet dollar demand, investment banking firm FBN Quest said in a note on May 7.
Nigeria, Africa’s most populous nation, relies on oil for about two-thirds of government revenue and more than 90% of foreign currency income.
The pandemic and the collapse of oil prices risk plunging the West African nation into its second recession in four years.
Authorities in March moved to devalue the naira when they adjusted the official rate to 360 per dollar from 307 naira and moved the rate at which investors and exporters could purchase the greenback to 380 naira from 366 naira.
This has not reduced the pressure on the local currency which now trades at 445 naira per dollar in the parallel market, indicating it could weaken further.
The lack of access to foreign exchange by local manufacturers is hampering their ability to import vital raw materials, machines and spares that are not available locally, the group said.
The central bank needs to “prioritize improved access to foreign exchange for operators in the real sector” to enable them to acquire inputs that are not available in the country.
Nigeria Says Investors Wanting to Withdraw Funds Must Be Patient
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