Nigerian producers have warned that rising prices triggered by Russia’s war against Ukraine pose a “threatening crisis” for companies in Africa’s largest economy.
The rise in the cost of diesel, wheat and other imported materials, combined with high interest rates, a lack of US dollars and rising inflation, paralyzes production in Africa’s most populous country, the Manufacturers Association of Nigeria said in an email presentation on Thursday.
Nigerian producers are largely dependent on diesel – which has doubled in price this year – to power their machines due to unreliable power supply from the national grid. The price of wheat, a key raw material for flour mills and other food processors, has also risen.
Businesses are worried that inflation, which accelerated to 15.9% in March, could rise further if a longer-term conflict prolongs supply chain disruptions, the group said.
Dangote Cement Plc, the country’s largest company, reported a 3.6% drop in sales in the first quarter to 7.2 million tonnes compared to the previous year, partly due to volatility in the value and landing costs of cement and clinker in some of its markets . It comes when some countries stopped exports for fear that local supply could be affected by the war, CEO Michel Puchercos said in an investor call.
The current situation “calls for the development of a national strategy for response and sustainability to avert the looming economic crisis and shortage that would arise as a result of the impact of Russia’s invasion of Ukraine,” the production agency said.
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