The Central Bank of Nigeria has said that the country is spending over $4billion annually on imported textiles and ready-made clothing.
It noted embargo has been placed to access foreign exchange for all forms of textile materials on the FOREX restriction list.
According to the bank’s Governor, Godwin Emefiele, CBN would adopt a range of other strategies that would make it difficult for recalcitrant smugglers to operate banking business in Nigeria.
Emefiele also assured 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.
He explained that the support would enable the manufacturers to produce high quality textile materials for local and export market.
The governor assured stakeholders that CBN would support the creation of textile production centres in certain designated areas where access to electricity would be guaranteed.
He said that many firms had to lay off workers and that only 25 textile factories were currently operating at below 20 per cent of their production capacities and the workforce in Nigeria’s textile industry standing at less than 20,000 employees.
Emefiele decried the moribund Nigerian textile industry, adding that in the 1970s and early 1980s, Nigeria 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: “With the death of these industries, came a rise in unemployment, insecurity and other negative social vices”.
Also, the governor explained that the details of those strategies would be unfolded in due course.
Emefiele stressed that smuggling would be dealt with seriously in order to discourage importation of textiles and force sellers of textile and garments to buy from Nigerian producers
Emefiele dropped the hint Tuesday in Abuja during a meeting with textile industry operators. He said the policy would take effect immediately.
He added that the restriction would rejuvenate the textile industry in Nigeria and ensure that the needed growth is actualised.
Emefiele said the bank would 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 2020.
He said: “All FOREX dealers in Nigeria are to desist from granting any importer of textile material access to forex in the Nigerian Foreign Exchange market.
“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.”
He noted 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.
The governor said that the bank would support efforts to source high yield cotton seedlings to ensure the yields from Nigeria’s cotton farmers met global benchmarks.