The Central Bank of Nigeria, (CBN) yesterday added all forms of textile materials to the list of items that are not eligible for foreign exchange with immediate effect following the whooping $4billion spent annually on importation of textile materials into the country.
However, CBN has promised financial intervention to textile manufacturers with the provision of funds at a single digit rate to refit, retool and upgrade their factories to enable them produce high quality textile materials for the local and export market.
The CBN governor, Mr. Godwin Emefiele speaking with stakeholders yesterday, Wednesday 6th March 2019, in a meeting said the decision was critical towards reviving the moribund sector and creating jobs for unemployed Nigerians.
He warned all FX dealers in the country to desist from granting any importer of textile materials access to foreign currency in the Nigerian foreign exchange market.
He also said the apex bank of the country would adopt a range of other strategies that will make it difficult for recalcitrant smugglers to operate banking business in Nigeria, adding that details of the proposed strategies would be unfolded in due course.
“Effective immediately, the CBN hereby places the access to FX for all forms of textile materials on the FX restriction list”, said Emefiele.
He also said that the apex bank would support the importation of cotton lint for use in textile factories, with a caveat that such importers will begin to source all their cotton needs locally beginning from 2020. This declaration was highly appreciated by cotton, textile and Garment Association (CTG).
He also said the CBN would craft adequate measures to deal with the menance of smuggling which had often threatened efforts towards self-sufficiency.
“CBN will make it difficult for smugglers. We will deal with smuggling this time. We know what we will do to make it difficult for them to import textile. We will try economic solution to textile”.
This funding intervention and ban on textile smuggling is targeted towards restoring the lost glory of the textile industry.
However, as part of its anchor borrowers programme, (ABP) the apex bank would also support local growers of cotton to enable them meet the needs of the textile industries in the country.
“The CBN would support efforts to source high-yield cotton seedling to ensure the yields our cotton farmers meet global benchmark”.
He further stated that as regards the provision of stable electricity. The CBN would support the creation of textile production centers in certain designated areas in the country where access to electricity shall be guaranteed. He expressed the confidence that these measures would discourage smuggling, resuscitate the critical industry and support stakeholders effort creating jobs for Nigerians.
The CBN Governor noted that with a projected populated of over 18million the needs of Nigerians domestic market are huge and varied with immense propect not only for job creation but also for growth of the domestic textile industries.