Nigeria’s tight foreign exchange trading rules are hurting local importers and has pushed a Norwegian dried stockfish supplier close to bankruptcy as it is unable to get enough hard currencies to pay its foreign suppliers.
The west African country is Norway’s single largest stockfish markets, and trades over $58 million worth of the dried fish heads and other off cuts every year. The fish, popularly known as ‘Okporoko’ by members of the Igbo tribe, is a big local delicacy and is used as a flavoring in soups.
Erling Falch, a stockfish importer at a company referred to as Saga Fisk based in Lofoten islands, told The Local no that the Central Bank of Nigeria’s decision to ban importers from using the forex market for some 40 type of goods, including stockfish, had grounded their business.
“Nigeria is our main market. Over half our turnover is stockfish and if the business stops for a few months, our company will be rapidly in the red,” Falch said, adding that he has had to lay off 50 employees to cut costs.
Falch said his company exports as much as 100 tons of stock fish to Nigeria every week during the peak season. It now holds over 500 tons in its warehouse that could go bad if not sold soon.
Like many other countries on the continent, Nigeria has been struggling to stem a local currency rout as commodity prices fall globally and the US rises its interest rates, which has strengthened the dollar.
The Africa’s largest economy, is the top oil producer on the continent and has suffered heavily after crude oil prices tumbled on the international markets.
It’s effort to cushion the naira against external shocks has seen it burned through 27 percent of its foreign exchange reserves as the Central Bank of Nigeria tried fruitlessly to stem a 50 percent plunge in the local currency over the last year.
The bank has now resorted to stiff trading restrictions that have made it difficult for local companies to pay their overseas suppliers.
Last week, that regulator banned commercial banks from taking any foreign currency cash deposits from their customers, saying it was concerned over the increase of foreign currencies in their vaults that could be from people laundering money.
“The central bank is doing all it can to control demand for dollars,” Sewa Wusu, the head of research at Sterling Capital Markets, told Bloomberg.
