By Tony Obiechina, ABUJA
The Central Bank of Nigeria (CBN) on Tuesday announced stringent measures aimed at reviving the moribund textile industry as well as curb the smuggling of foreign fabrics into the country.
CBN Governor, Mr Godwin Emefiele who made the announcements while addressing a meeting of textile industry stakeholders in Abuja said it had with immediate effect placed access to forex for all forms of textile materials on the restriction list.
He said, “Accordingly, all FX dealers in Nigeria are to desist from granting any importer of textile material access to FX in the Nigerian Foreign exchange market.
“In addition, we shall adopt a range of other Strategies that will make it difficult for recalcitrant smugglers to operate banking business in Nigeria. The details of those strategies will be unfolded in due course”, he said.
According to the Governor, the CBN “shall initially support the importation of cotton lint for use in textile factories, with a caveat that such importers shall begin sourcing all their cotton needs locally beginning from year 2020”.
He said as part of its Anchor Borrowers Program, the CBN will support local growers of cotton to enable them meet the needs of the textile industries in Nigeria as well as support efforts to source high yield cotton seedlings.
On the provision of stable electricity, Emefiele said the CBN shall support the creation textile production centers in certain designated areas in Nigeria where access to electricity shall be guaranteed.
He recalled that “In 2016, the CBN began discussions with the Kano and Kaduna State Governments to establish textile industrial areas in a bid to guarantee stable electricity in those industrial areas. We would intensify efforts with these governments and others that may show keen interest to see to the quick actualization of such programs.
“We believe that these measures will discourage smuggling, resuscitate this critical industry, and support your efforts at creating jobs for Nigerians”, he stressed.
The Governor pointed out that the past 20 years have been very difficult for many textile firms as they faced rising operating cost and weak sales due to high energy cost, smuggling of textile goods, and poor access to finance.
“Many of them have had to lay off employees. Today, most of the factories mentioned have all stopped operations, as only 25 textile factories are operating today at below 20 percent of their production capacities, and the workforce in Nigeria’s textile industry stands at less than 20,000 people.
“In addition, the cotton growing sector has gone dead, thereby depriving thousands of small holder farmers the opportunity to earn a living. Furthermore, a large proportion of our clothing materials are imported from China and countries in Europe”.
He said the CBN has to intervene at this stage, ” to redirect our focus to the important role the textile industry played in our country. They did more than produce cottons and textiles, they helped in sustaining the vitality of the neighborhoods in which they operated. With the death of these industries, came a rise in unemployment, insecurity and other negative social vices” Emefiele added.
Nigeria currently spends over $4 billion annually on imported textiles and ready-made clothing. With a projected population of over 180 million Nigerians, the needs of the domestic market are huge and varied, with immense prospects, not only for job creation, but also for growth of the domestic textile industries.
