Starved of dollars, Nigerian businesses struggle for survival

Manufacturing

(Reuters) – As women in hairnets and anti-coronavirus masks sort through folded nappies coming off a conveyor belt, the head of the Nigerian firm they work for wonders how much longer he can afford to keep them in employment.

Around 80% of the materials that go into Lagos-based diaper and sanitary towel manufacturer Wemy’s products are imported. To buy them, Paul Odunaiya needs dollars, which he can no 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.”

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