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LequteMan
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The CBN's foreign exchange policy which restricted dollar sales to importers of 700 items has backfired on the state of the country's economy, Reuters says.
Companies making anything from soap to tomato paste could run out of raw materials and be forced to shut down following the measure which was set up to prevent a currency collapse.
While Nigeria grows a lot of tomatoes, transport is poor and it lacks facilities to produce the concentrate needed by factories making tomato paste, a staple in the West African nation.
According to the Lagos Chamber of Commerce, Nigeria is short of 600,000 tonnes a year of palm oil, that is used to make soap, detergents and cosmetics that have also been restricted. Pharmaceutical firms lack bottles, and glass manufacturers do not have the glass to make them.
Since the central bank unveiled its controls in June, executives have had to deal with foreign suppliers worried they won't get paid. They also struggle to convince banks to approve dollar payments.
As a result some firms have defaulted on contracts and lost credit lines. "Many companies have defaulted on fulfilling foreign obligations ... even blue chip companies ... for the first time," said Muda Yusuf, director general of the Lagos Chamber of Commerce said.
Governor of the Central Bank, Godwin Emefiele, has warned that the economy would go into recession if things continued this way.
Companies making anything from soap to tomato paste could run out of raw materials and be forced to shut down following the measure which was set up to prevent a currency collapse.
While Nigeria grows a lot of tomatoes, transport is poor and it lacks facilities to produce the concentrate needed by factories making tomato paste, a staple in the West African nation.
According to the Lagos Chamber of Commerce, Nigeria is short of 600,000 tonnes a year of palm oil, that is used to make soap, detergents and cosmetics that have also been restricted. Pharmaceutical firms lack bottles, and glass manufacturers do not have the glass to make them.
Since the central bank unveiled its controls in June, executives have had to deal with foreign suppliers worried they won't get paid. They also struggle to convince banks to approve dollar payments.
As a result some firms have defaulted on contracts and lost credit lines. "Many companies have defaulted on fulfilling foreign obligations ... even blue chip companies ... for the first time," said Muda Yusuf, director general of the Lagos Chamber of Commerce said.
Governor of the Central Bank, Godwin Emefiele, has warned that the economy would go into recession if things continued this way.
