Nigeria is wooing local companies to boost manufacturing and food production in the West African country, the central bank said, after the novel coronavirus disrupted imports and created large financing needs.
The coronavirus outbreak and an oil price plunge have intensified headwinds for Nigeria, which relies on imports for consumption, triggering a historic decline in growth and large financing needs.
The government expects the economy to shrink by 3.4% this year as measures to slow the spread of the virus create bottlenecks for manufacturers, struggling to boost output in a nation without a strong productive base.
Central Bank Governor Godwin Emefiele urged domestic companies to support efforts to grow the economy, he told chief executives of conglomerates operating in Nigeria at a virtual meeting over the weekend.
Emefiele said the bank was willing to provide hard currency for imports of machinery and raw materials that cannot be sourced at home, he said in a statement.
Nigeria is facing dollar shortages worsened by the oil price crash that has weakened the naira currency. Emefiele said Nigeria’s reserves of about $37 billion were robust enough to support the economy and the bank would not stop dividend repatriation.
Offshore investors have yet to get dollars to repatriate funds since last month’s lockdown aimed at curbing the spread of the virus. The bank has said it wants to ensure an orderly exit of investors.
It added it would prioritise strategic imports or service obligations for dollars to galvanise local manufacturing.
President Muhammadu Buhari has been trying to diversify the economy away from oil by boosting the non-oil sector.