A Nigerian tomato paste plant said Thursday it is shutting down, firing 1,500 staff and moving abroad because it is unable to obtain the hard currency it needs to operate.
The move is a public embarrassment for President Muhammadu Buhari and his plan to diversify the economy. Buhari, elected last year on a ticket to fix a country mismanaged for decades, frequently talks about ending the country’s dependency on oil exports by boosting local food production, repeating his mantra: “We must produce what we eat.”
His wife, Aisha, attended the February launch of the Erisco tomato processing plant in the commercial capital Lagos, hailed by officials as the start of a new era that would end the costly business of importing tomato paste, a staple food in Nigeria.
But eight months later, the firm is abandoning the West African country, and openly criticizing the government and central bank in a strongly worded public letter to Buhari for failing to support it.
Erisco has been forced “against our wish to create jobs in foreign lands due to the evil and wicked desires of unpatriotic Nigerians who frustrate every effort we have made to genuinely create jobs and grow our economy,” founder Eric Umeofia said in the letter, published in newspapers Thursday.
“CBN (the central bank) refused to give us forex to import machineries, machine spare parts and raw materials to be used for processing of Nigerian fresh tomatoes into tomato paste in our Lagos factory,” he said. He said the central bank had banned the firm from using its own hard currency deposits of $460,000.
The presidency and the central bank could not immediately be reached for comment.
The central bank has effectively banned the import of 700 types of goods including machines and raw materials to offset a massive loss in oil revenue, the country’s lifeline. The bank has also kept the naira at an artificially high rate versus the dollar to avoid another devaluation, which entrepreneurs say has deterred investors. Buhari has repeatedly spoken out against devaluing the naira.
Erisco said it had hoped the government would support it by banning imports of tomato paste, as it had done in the past with cement or some fruits to help Nigerian manufacturers.
The company has accumulated losses of 3.6 billion naira ($11.8 million), Umeofia said.
This article was first published by Reuters.