The Central Bank of Nigeria’s (CBN) plan to blacklist companies, individuals smuggling textile materials and ready-made clothing into the country, and bar banks from doing business with violators, is a welcome development. About 130 textile industries had collapsed in the last 20 years due to smuggling and dumping. The fact that the Federal Government spends about $4bn or N1.4 trillion on the importation of textiles annually makes the new plan imperative.
The CBN Governor, Mr. Godwin Emefiele, unveiled the new plan in Katsina State when he flagged off the distribution of cotton seeds and other inputs to cotton farmers in the state. He also disclosed that government is investigating the accounts of individuals and corporate entities involved in the smuggling of textiles. He said that any bank found to be conducting any form of business with the firms, their owners and top management, will be severely sanctioned.
The government has constituted a national committee on revamping the Cotton, Textile and Garment (CTG) sector to drive the initiative to achieve self-sufficiency in cotton production and textile material within the next five years. Members of the committee are the CBN, Federal Ministries of Agriculture and Rural Development, Water Resources, Trade and Investment and the governments of Kano, Kaduna, Katsina, Gombe and Zamfara states.
We laud the new plan to revive the nation’s textile industry. There is no doubt that the plan to improve cotton production from 80,000 tonnes to over 300,000 tonnes by 2020 is a step in the right direction. It will help conserve the nation’s foreign exchange (forex) and create more jobs in the country. Currently, a lot of forex is expended on importation of textiles and other ready-made clothing. Lack of cotton seeds has also been identified as one of the major challenges facing cotton farmers.
It is hoped that the provision of cotton seedlings and more hectares of land, along with extensive training and proper farming techniques, including fertilizer, pesticides and knapsack sprayers to farmers, will boost production of high grade cotton lint at much improved yields.
With an estimated loss of over $2.2billion annually due to the smuggling of textile materials and additional $4billion spent on importation of textiles every year, the way forward is to revive all the textile industries across the country. It is sad that due to the activities of smugglers, over 130 textile factories have collapsed while only 20 are currently in operation with less than 20,000 workers. In the 70s and early 80s, the textile sector was reputed to employ over 450,000 people, representing about 25 per cent of the workforce in the manufacturing sector. We believe that the sector can still create more jobs and reduce the present unemployment rate projected to rise to 33.5 per cent next year. Unfortunately, the nation’s youth unemployment is estimated at over 30 per cent.
While the CBN’s plan to curb the activities of smugglers in the sector is quite commendable, the apex bank should enlist the collaboration and commitment of the Nigeria Customs Service (NCS) and other border patrol agencies to achieve the objective of riding the country of foreign textile materials. We recall that not quite long ago, the CBN placed restriction on the sale of forex to importers of textiles and other clothing materials in the country. The apex bank must ensure that the ban is enforced. With Nigeria’s large population, there is no doubt that a huge market exists for the textile sector to thrive if its challenges are urgently addressed.
Above all, the battle against smuggling and indiscriminate dumping of foreign fabrics in the country must be a continuous exercise. Given the high domestic demand for textile materials, the current effort by the CBN will have a multiplier effect on the economy, provided that government creates the enabling environment. Government should step up efforts to ensure stable electricity supply and increase access to credit at single digit level to cotton farmers and others in the textile sector. Therefore, a robust textile sector will also help to diversify the economy and make it less dependent on oil revenue.