CBN restricts Forex for textile products importation


CBN Governor, Godwin Emefiele

The Central Bank of Nigeria (CBN) has placed a restriction order on access to FOREX meant for import of textile products.

Governor of the CBN, Mr. Godwin Emefiele, annoumced this on Tuesday in Abuja during a stakeholders meeting with textile manufacturers and cotton farmers.

He made it clear that the restriction order takes immediate effect, therefore making the list of restricted items for Forex access to 44.
The CBN governor said that the decision is meant to protect the local industry dealing with textile products, considering that Nigerians currently spend over $4 billion annually on imported textiles and ready-made clothing.
He noted that with a projected population of over 180 million Nigerians and the need for provision of uniforms and clothing apparels for school students, military and paramilitary officers as well as workers in the industrial sector, a protected local market would create jobs and grow the domestic textile industries.
Emefiele, therefore, said: “Accordingly, all FX dealers in Nigeria are to desist from granting any importer of textile material access to FX 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.”
He added that the CBN and other key stakeholders would work hard to revive the textile industry, which is projected to earn about $10 billion annually, and used to consume cotton produced by at least 600,000 local farmers across 30 states of the country’s 36 states.
To be able to revive companies such as the United Textiles in Kaduna, Supertex Limited, Afprint, International Textile Industry (I.T.I), Texlon, Aba Textiles, Asaba Textile Mills Ltd, Enpee and Aswani Mills, Emefiele listed the following policy framework and action:
* restructuring of the Bank of Industry’s loans already accessed by members of the textile industry to become fresh facility;
* 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;
* 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
*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.
On getting the global quality mark, Emefiele said the CBN shall also support efforts to source high yield cotton seedlings in order to ensure that yields from local cotton farmers meet global benchmarks.