Setback in Local Production Due to Dollarisation of Raw Materials

Setback in Local Production Due to Dollarisation of Raw Materials

It has become sickening to wake up every morning to yet another news about the Nigerian economy and issues about scarcity of foreign currencies. It is even worse to find out that the  citizens complaining about the state of the economy are the same people contributing to its downfall. There have been countless talks about patronizing local producers; buy Nigerian made products, eat/drink/laugh Nigeria and yet, the same Nigerians are making things difficult for other citizens. We cannot enjoy the change we desire except we become the change in our respective environments and communities.

The Guardian Newspaper published in the news today about how farmers are causing a setback for local producers which may cause rise in cost of local commodities (this seems to be the reason why price of goods increase in the market/shops almost every week). Farmers and other raw material providers will rather export their raw materials than sell to local producers except they agree to buy the raw materials in dollars. How unfair? Raw materials produced in Nigeria, watered by rain in Nigeria and harvested in Nigeria but to be sold in dollars. Haba!!! I really don’t see how this makes sense. All I can deduce from this is “GREED”. How can we move forward with this kind of extortion mindset? See excerpts from the news below –

The Federal Government’s efforts at diversifying the economy and reducing dependence on importation are being undermined by value-chain operators, farmers and providers of key raw materials who would rather export raw commodities for foreign exchange than sell to local producers at market prices. The hot chase for forex by farmers and other raw material providers outside of government control will lead to higher prices, especially as scarcity and demand from neighbouring countries put pressure on local supply.

The Senior Special Assistant on Media and Publicity to the President, Garba Shehu, had raised the alarm that the country currently risks famine from early next year due to the huge export of the country’s grains to attract foreign exchange, even when local demands have not been met.

Local manufacturers say raw commodities like cotton, grains and natural gas, among others are being offered to local manufacturers at prevailing international market prices and payment being demanded in foreign exchange even as the materials are being harvested and produced domestically.

The President of the Nigerian Textile Manufacturers Association (NTMA), Mrs. Grace Adereti, canvassed the revival of the Commodities Board as a measure to ease textile manufacturers’ access to raw materials for production.

Lamenting the present situation, Adereti said: “When we contacted the farmers, they said that they are not ready to supply to us at the price negotiated by the ginners. Further inquiry showed that farmers based their price on what they will generate from exporting the cotton. They want to sell at 40 cents per kilogramme of cotton.

“If we accede to the price, our output will become uncompetitive considering the infrastructural deficit in the country, which affects the cost of production. We are in a fix. Some factories have suspended production because they do not have cotton for production.

The Chairman, MAN Gas Users Group, Dr. Michael Adebayo stated that dollarisation of materials needed for production is a disincentive for local producers, adding that the trend has affected gas pricing, with many operators struggling to keep their factories running.

Read the full article The Guardian

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One thought on “Setback in Local Production Due to Dollarisation of Raw Materials

  1. damilare - December 14, 2016 at 4:52 am

    Nigeria…there was a country..greed everywhere..


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