CBN gives boost to local entrepreneurs in textile industry

The Central Bank of Nigeria has banned the sale of foreign exchange to importers of all types of textile materials with immediate effect as part of efforts to boost local production.

The new restriction raises the list of items banned from accessing forex from the official windows to 43.

The CBN Governor, Mr Godwin Emefiele, disclosed this yesterday at a textile industry stakeholders’ meeting in Abuja, according to the News Agency of Nigeria.

He said, “Effective immediately, the CBN hereby places the access to forex for all forms of textile materials on the forex restriction list.”
Emefiele directed all forex dealers in Nigeria to desist from granting any importer of textile material access to forex in the Nigerian forex market.

He said that the apex bank would adopt a range of strategies that would make it difficult for recalcitrant smugglers of textile materials to operate banking business in Nigeria.

The governor said, “You know the CBN does not carry guns, arms or have to be at the border posts but we know what we will do to make it difficult for those smugglers to bring in those things into Nigeria and we will unfold those to you.

“So, when we make it difficult for them to smuggle those things into the country, it opens the market for you so that those who would have gone to buy those things will be forced to come to you.

“That is one economic solution that I see and since the government itself has already signed an executive order, that will compel everyone to flow in your direction.”

Emefiele also informed the public that the bank would give support to the importers of cotton lint for use in textile factories, with a caveat that such importers should begin sourcing all their cotton needs locally beginning from 2020.

He added that as part of its Anchor Borrowers Programme, the CBN would support local growers of cotton to enable them to meet the needs of the textile industry in Nigeria.

He also said that the bank would support efforts to source high-yield cotton seedlings to ensure the yields from Nigeria’s cotton farmers meet global benchmarks.

Emefiele added that the bank would provide financial support to textile manufacturers with the provision of funds at single digit rate to refit, retool and upgrade their factories.

This, according to him, is for them to be able to produce high-quality textile materials for the local and export markets.

The governor also assured the stakeholders that regarding provision of stable electricity, the CBN would support the creation of textile production centres in certain designated areas where access to electricity would be guaranteed.

He said, “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 actualisation of such programmes.

“We believe that these measures will discourage smuggling, resuscitate this critical industry, and support your efforts at creating jobs for Nigerians.”

Emefiele decried the state of Nigeria’s textile industry, adding that in the 1970s and early 1980s, the country was home to Africa’s largest textile industry, with over 180 textile mills in operation, which employed close to over 450,000 people.

He said that if the industry had been nurtured and encouraged, it would 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,” he added.

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