Textiles and garments imports have joined the FOREX restriction list of the Central Bank of Nigeria, Godwin Emefiele, the Governor of the apex bank, announced in Abuja.
Emefiele made the announcement during a meeting with textile industry stakeholders and added that the policy would take effect immediately.
Nigeria spends an estimated $4billion on imported textiles yearly.
Emefiele said that the restriction would rejuvenate the textile industry in Nigeria and ensure that the needed growth was actualised.
“Accordingly, all FOREX dealers in Nigeria are to desist from granting any importer of textile materials 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,” the governor said.
As part of CBN’s intervention for the industry, 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 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 met global benchmarks.
Emefiele also assured the stakeholders 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, he said, was for them to be able to produce high quality textile materials for local and export market.
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.
Emefiele said it was no secret that the past 20 years was very difficult for many textile firms as they faced rising operating cost and weak sales due to high energy cost, smuggling of textile goods and poor access to finance.
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, however, said that reviving Nigeria’s textile sector was very important as it was vital to the nation’s growth objectives and its efforts at creating jobs for Nigerians on a massive scale across the textile sector value chain.
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 that if the industry had been nurtured and encouraged, it would be employing millions.
The National President, National Cotton Association of Nigeria, Mr Anibe Achimugu, said the association was very pleased with the interventions by CBN but appealed that the interventions should begin quickly.
In 2015, CBN restricted the availability of foreign exchange to the importation of 41 items which could be competitively produced within the economy and the list has increased overtime.