CBN explains for forex restriction for textile products…Says rumoured removal of gov. wicked
BY FRANCIS EZEM
The Central Bank of Nigeria, CBN, has directed commercial banks and Bureau the Change operators to, hence forth, stop sale of foreign exchange to importers of textiles and clothing materials in the country as part of measures to grow local industry.
Governor of the apex bank, Mr. Godwin Emefiele, who unfolded the new directive to newsmen Tuesday in Abuja during a meeting with stakeholders in the cotton sector of the economy, said the restriction had become necessary to check the influx of such materials and therefore encourage the growth of the textile and cotton industry in Nigeria.
Apart from that, Emefiele also explained why textile products had to be included on the forex restriction list, disclosing that currently Nigeria spends above $4 billion annually on imported textiles and ready-made clothing materials, which can be produced locally.
He described as wicked his rumoured removal from office. While insisting that he had not received any memo from the presidency directing him to leave, he attributed the allegation to the handiwork of people opposed to the development initiatives leading to the restriction of forex for the importation of goods that can be produced locally by the apex bank.
He declared that irrespective of who succeeds him after June 3 this year when his term expires, these development initiatives would be sustained.
“I’m doing my work; my tenure expires on June 3 this year. So let’s continue. The development programme of the CBN has been on since 1978 and it has moved from one governor to another such that even if another governor comes, no right-thinking person would abandon an initiative that is laudable and is meant to create jobs and to the benefit of Nigeria”, he said.
On the disclosure that Nigeria spends over $4billion annually to import textiles and clothing materials, he said: “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.
“One quick example that highlights the potential of this local market is the need to support the provision of uniforms and clothing apparels for school students, military and paramilitary officers as well as workers in the industrial sector.
“With immediate effect, the CBN hereby places restriction on the access to forex for all forms of textile materials. Accordingly, all forex dealers in Nigeria are to desist from granting any importer of textile material access to forex 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”.
It was further gathered that when the apex bank considered the amount spent on outfits for religious and social events such as weddings, naming and funeral ceremonies on a weekly basis, the potential market size is well over $10billion annually.
According to Emefiele, if the CBN, along with other critical stakeholders, is able to address some of the challenges facing this key industry, given the high domestic demand for textiles, the country will be able to create jobs for the Nigerian economy and increase the production of textiles in the country.
The CBN boss spoke with nostalgia on how in the 1970’s and early 1980’s, Nigeria was home to Africa’s largest textile industry, with over 180 textile mills in operations, employing close to over 450,000 people.
“Today, if the country has 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 per cent 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.
“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, “the apex bank’s governor said.
To reverse the sector’s pitiable situation to the good old days, Emefiele listed the filling policy framework and action, which include restructuring of the Bank of Industry’s loans already accessed by members of the textile industry to become fresh facility and providing funds for textile manufacturers at a single digit rate, to refit, retool and upgrade their factories in order to produce high-quality textile materials for the local and export market.
Others include providing initial support for 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 2020; and that as part of its Anchor Borrowers Programme, the CBN will support local growers of cotton to enable them to meet the needs of the 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.
Recall that CBN had earlier this year, placed forex restriction on cement and tomatoes paste. The current restriction order on textiles, which is with immediate effect, brings the number of such items on the forex restriction list to 44.
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