February 17, 2017 / 7:20 AM / in 7 months

Nigeria's central bank gave key industries $2.83 bln Dec-Jan to boost economic recovery

Workers arrange bags containing cocoa beans at a cocoa processing factory in Ile-Oluji village in Ondo state, southwest Nigeria March 30, 2016. REUTERS/Akintunde Akinleye

ABUJA (Reuters) - Nigeria’s central bank has disbursed $2.83 billion to critical sectors of the economy in December and January, it said in a statement on Thursday, in an attempt to kickstart a struggling economy and alleviate a drought of foreign currency.

Nigeria’s economy is wallowing in its first recession in a quarter of a century, hamstrung in part by low exports of the crude oil on which the government depends for revenues and bringing in foreign currency.

That lack of dollars in particular has left businesses struggling to import overseas products they need. The situation has been exacerbated by a government-imposed exchange rate that critics say artificially keeps the naira around 40 percent stronger than it should be.

The Central Bank of Nigeria (CBN) said it favoured the manufacturing, raw material and agriculture sectors when disbursing the dollars in December and January, hoping to create employment and spur wealth creation.

The raw materials sector received $609 million in December and $228 million in January. Manufacturing got $53 million in December and $71 million in January, the CBN statement said.

The central bank is determined to continue to ease the foreign exchange pressure on critical sectors, the statement cited Isaac Okorafor, acting director of the communications department, as saying.

Nigeria’s dollar reserves have risen 8.39 percent since the beginning of the year, mirroring a rise in global oil prices, but remain far from a peak of $64 billion in August 2008.

Nigeria’s naira hit a new low on the black market on Wednesday. That spurred the head of the bureau de change association to urge members to help stabilise the currency, the continued weakness of which has become a “major concern” for the central bank.

Reporting by Camillus Eboh and Chijioke Ohuocha; Writing by Paul Carsten

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