PZ Cussons has revealed that it is paying up to a 70 percent premium on the going exchange rate for dollars in Nigeria thanks to foreign currency shortages in the country, according to a report published by Bloomberg.
“Whilst the official naira exchange rate continues to be stable, lack of availability at that rate is resulting in the majority of dollars being purchased at a premium of 50 to 70 percent,” said the company in a trading statement last week. “The resultant cost impact is being managed through changes to relative pricing in an environment where trading conditions remain challenging. The situation in Nigeria remains extremely fluid.”
The shortages have been created by restrictions placed on central bank trade, with the government pegging the naira at 197-199 against the dollar, deterring foreign investment and increasing prices on imports.