Women in hairnets and masks are sorting through diapers coming off a conveyor belt.
But the head of Wemy’s, the Nigerian company where they work, wonders how much longer he can afford to keep them on.
Paul Oduniya says his company needs dollars in order to import 80% of the materials the diaper and sanitary towel manufacturer needs.
“It means that we have to squeeze harder, increase our prices, and it slows down business basically in effect, so we are likely not to have enough goods in stock at some point, because of the reorder cycles that we have.”
But dollars are in short supply.
The price of Nigeria’s main export, oil, is depressed and foreign exchange reserves are dwindling; Leading the central bank to hang on to its dollars to support the local naira.
Imports, though, are the bedrock of Africa’s biggest economy and the dollar shortage has left businesses like Wemy’s struggling to survive.
“It helps us to be creative – look for ways to get the same products locally and we are now focusing on looking for any little local manufacturer that can kind of replicate what we import, but it is very difficult but we are finding some small opportunities here and there and taking advantage of it, yeah.”
The government says the economy could shrink by up to 8.9% in 2020, and many local banks have seen their dollar credit lines halted by international lenders who fear they won’t be paid back.
Many firms have resorted to the black market, where the naira trades at around 20% below the official rate, making dollar purchases even more expensive.
Women in hairnets and masks are sorting through diapers coming off a conveyor belt. But the head of Wemy’s, the Nigerian company where they work, wonders how much longer he can afford to keep them on. Paula Oduniya says his company needs dollars in order to import 80% of the materials the diaper and sanitary tile manufacturer needs.
PAUL ODUNIYA: It means that we have to squeeze harder, increase our prices. And it slows down business, basically, in effect. So we are likely not to have enough goods in stock at some point because of the reorder cycles that we have.
But dollars are in short supply. The price of Nigeria’s main export, oil, is depressed, and foreign exchange reserves are dwindling, leading the central bank to hang onto it’s dollars to support the local naira.
Imports though are the bedrock of Africa’s biggest economy, and the dollar shortage has led businesses like Wemy’s struggling to survive.
PAUL ODUNIYA: It helps us to be creative. Look for ways to get the same products locally. And we are now focusing on looking for any little local manufacturer that can kind of replicate what we import, but it’s very difficult. But we are where we are finding some small opportunities here and there and taking advantage of it. Yeah.
The government says the economy could shrink up to 8.9% in 2020, and many local banks have seen their dollar credit lines halted by international lenders who fear they won’t be paid back. Many firms have resorted to black market where the naira is at around 20% below the official rate, making dollar purchases even more expensive.
– Reuters.