In a clear indication of the current economic realities facing the country, Innoson Vehicle Manufacturing, Nigeria’s main domestic vehicle assembly company has announced that it is shutting down production due to FOREX related issues.
Innoson Vehicle Manufacturing (IVM) revealed it could no longer purchase imported automotive components, a challenge that has left its Vehicles without engines, an apt metaphor for the problems facing Nigeria since the advent of the Muhammadu Buhari-led administration.
In an economy starved of dollars because of the slump in oil prices, it has become a regular feature of the news to hear of companies, small and medium scale industries shutting down its activities as it becomes increasingly difficult to keep up with economic realities in the nation.
This revelation came as GDP figures on Wednesday confirmed that Nigeria’s economy slid into its first recession in 25 years in the second quarter, shrinking by 2.06 percent after a 0.36 percent contraction in the first three months of the year.
Chairman Of Innoson Vehicle Manufacturing, Chief Innocent Chukwuma said:
“Production had stopped as we are waiting for the imported items for which there is a forex issue,I believe they are doing something but if they can’t do anything we’ll lay off some workers,”
Launched in 2010, IVM last year raised its annual production target for 2016 from 4,000 to 6,000 vehicles due to a “Made in Nigeria” campaign that generated strong sales to the police, state agencies and churches.
The poor state of the manufacturing sector in particular is a blow to President Muhammadu Buhari, who has been pushing hard to wean Nigeria off its dependence on crude oil sales, which make up an astonishing 70 percent of government revenues.