The Central Bank of Nigeria (CBN) has asked commercial lenders to allocate 60 percent of their foreign exchange purchases to manufacturers, in a bid to boost their ability to pay for imports and boost the economy.
Fall in oil revenues have caused widespread dollar shortages. This has hit manufacturers’ ability to import raw materials and spare parts, forcing many plants to close.
CBN said in a circular that it wanted to encourage the production of local goods by asking banks to allocate more hard currency to industrial firms.
The circular read, “Authorised dealers (banks) are hereby directed to dedicate at least 60 percent of their total foreign exchanger purchases from all sources to end-users strictly for the purposes of importation of raw materials, plant and machinery.“
But so far trading in the official foreign exchange market has been limited as those with dollars prefer to sell them for a higher rate on the black market.
Nigeria’s economy contracted in the first quarter and officials have said recession is likely.