CBN bans importers of textile materials from accessing forex

…Says Nigeria spends $4bn on imported textiles
In its continuous effort to save the nation’s foreign reserves and promote locally made goods, the Central Bank of Nigeria (CBN) has restricted access to forex for importation of all forms of textile materials into the country.

The CBN governor, Mr. Godwin Emefiele, who announced the fresh restriction on Tuesday in Abuja at a meeting with textile industry stakeholders, said that the restriction takes immediate effect.

This restriction brings to 43 the number of items currently on forex restriction ban.

According to the central bank governor, Nigeria currently spends above $4 billion annually on imported textiles and ready-made clothing.

Emefiele said that 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.

He said: “One quick example that highlights the potential of this local market, includes the need to support provision of uniforms and clothing apparels for school students, military and paramilitary officers as well as workers in the industrial sector.”

This came as Emefiele debunked rumours of his removal that trended on Monday in social media space.

“At least you can see me here doing my work. My tenure expires in June. The interventions of CBN have been on since 1978 and I can tell you that no right thinking person will discontinue an intervention meant to create jobs, grow the economy,” CBN governor added.

CBN’s meeting with textile owners was conveyed to find permanent solution to problems bedevilling textile sector that has led to the collapse of over 100 textile mills in the country.

The governor listed CBN’s action plan to resuscitate the sector. This include financial support to textile manufacturers with the provision of funds at single digits rate, to refit, retool and upgrade their factories in order to produce high quality textile materials for the local and export market.

“Effective immediately, the CBN hereby place the access to FX for all forms of textile materials on the FX restriction list. 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”.

“We 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”, Emefiele said.

In addition, he assured textile industry stakeholders that the bank will leverage its Anchor Borrowers Programme to support local growers of cotton to enable them meet the needs of the textile industries in Nigeria.

“The CBN shall also support efforts to source high yield cotton seedlings so as to ensure the yields from our cotton farmers meet global benchmarks.

As regards provision of stable electricity, the CBN shall support the creation textile production centres in certain designated areas in Nigeria where access to electricity shall be guaranteed “, he added.

The governor said apex bank will follow-up with its earlier discussion started in 2016 with the Kano and Kaduna State Governments to establish textile industrial areas in a bid to guarantee stable electricity in those industrial areas.

Emefiele lamented the collapse of most textile industries in the country that employed thousands of Nigerians at their peak in 70s and 80s.

“As you are aware, in the 1970s and early 1980s, Nigeria was home to Africa’s largest textile industry, with over 180 textile mills in operations, which employed close to over 450,000 people.

By today, if we had nurtured and encouraged the textile industry, that sector will be employing millions. The textile industry at that time was the largest employer of labour in Nigeria after the public sector, contributing over 25% of the workforce in the manufacturing sector.

This industry was supported by the production of cotton by 600,000 local farmers across 30 of Nigeria’s 36 states.

This sector supported the clothing needs of the Nigerian populace, as our markets were filled with locally produced textiles from companies such as United Textiles in Kaduna, Supertex Limited, Afprint, International Textile Industry (I.T.I), Texlon, Aba Textiles, Asaba Textile Mills Ltd, Enpee and Aswani Mills amongst several others.

“It’s no secret that the past 20 years have been very difficult for many textile firms. They have faced rising operating cost and weak sales due to high energy cost, smuggling of textile goods, and poor access to finance,” he said.

The governor regretted the sorry state across the textile industries with employees laid off while most of the factories had stopped operations leaving only 25 textile factories in operations.

“Textile factories 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. At this stage, we intervened 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 “, said CBN governor.

He solicited for support, cooperation of textile stakeholders in the effort to addressing some of the challenges facing textile industry. He was of belief that “given the high domestic demand for textiles, “we will be able to create jobs for our economy, while increasing production of textiles in Nigeria”.

Responding, National President, National Cotton Association of Nigeria, Mr. Anibe Achimugu, commended CBN for its decisive intervention to revamp textile industry.

He appealed to governor to expedite action on Anchor borrower fund promised cotton growers, stating that planting season was almost at hand.

“You have done well sir. That you called to this meeting on ways to resuscitate textile industry, we are most grateful to CBN “, Achimugu said.