Forex crisis: Innoson Motors shuts down production

At a factory in southeast Nigeria, dozens of new white buses stand at the end of the production line, ap¬parently ready to take on some of Africa’s toughest roads.
Unfortunately for Nigeria’s main domestic vehicle assem¬bly firm they are going nowhere for now.
In an economy starved of dol¬lars because of the slump in oil prices, Innoson Vehicle Manu¬facturing (IVM) cannot buy im¬ported components, leaving the buses without engines - a meta¬phor for the problems afflicting Africa’s most populous nation.
GDP figures on Wednesday confirmed that the continent’s biggest economy slid into its first recession in 25 years in the sec¬ond quarter, shrinking by 2.06 percent after a 0.36 percent con¬traction in the first three months of the year.
The poor state of the manu¬facturing sector in particular is a blow to President Muhamma¬du Buhari, who has been push¬ing hard to wean Nigeria off its dependence on crude oil sales, which make up 70 percent of government revenues.
At IVM, whose products are intended to show Nigeria can export more than oil, workers have already been sent home be¬cause of a lack of parts from Ja¬pan, China and Germany, which account for much of the content of the vehicles they produce.
Production had stopped “as we are waiting for the imported items for which there is a forex issue,” chairman Innocent Chuk¬wuma said at the firm’s plant at Nnewi, in southern Nigeria.
Launched in 2010, IVM last year raised its annual produc¬tion target for 2016 from 4,000 to 6,000 vehicles due to a “Made in Nigeria” campaign that gen¬erated strong sales to the police, state agencies and churches.
Those ambitions are now looking shaky if promises of gov¬ernment assistance fail to mate¬rialise, Chukwuma said.
“I believe they are doing something but if they can’t do anything we’ll lay off some workers,” Chukwuma said. (Re¬uters)