CBN’s intervention in Nigeria’s textile industry - NEW TELEGRAPH
Some of the policies being propelled by the current administration to grow the economy are certainly with far-reaching and sustainable developmental indices.
Despite what appears like an endless privation, every action actually consolidates Federal Government’s quest for full scale self-reliance, job creation and economic growth.
This again was recently demonstrated by the Central Bank of Nigeria’s (CBN) revelation a fortnight ago that it had so far released N50 billion to stakeholders in the textile industry out of the N100 billion earmarked to revamp the sector.
Obviously, with such a gesture, the country, in a couple of months, may begin to witness a gradual return to the days when textile factories dotted the landscape.
While confirming the release of N19 billion for the same purpose, the CBN Governor, Mr. Godwin Emefiele, whose passion to see this project through has been limitless, took another landmark step to give impetus to President Muhammadu Buhari’s Executive Order 003, which compels both military and para-military bodies to source their official clothing locally.
The latest action is an offshoot or a continuation of promises made in the not-too-distant past when the governor shut access to foreign exchange against importers of textile materials and palm oil.
For the record, Nigeria’s textile industry in the past was the envy of the continent, but the profligacy that dominated past administrations sank a sector that once reigned as the highest employer of labour.
Then, Kaduna and Kano, down to Lagos in the South-West and Aba in the South-East boasted of textile mill factories that equally provided thousands of direct and indirect employment to residents in those locations. Sadly, those factories have either been taken over as mere warehouses or locked up with the equipment vandalised over the years.
In the 1970s and early 1980s, Nigeria was home to Africa’s largest textile industry, with over 180 textile mills in operations, which employed close to over 450,000 people. By today, if we had nurtured and encouraged the textile industry, that sector will be employing millions.
The erstwhile textile industry – which had companies such as United Textiles in Kaduna, Supertex Limited, Afprint, International Textile Industry (ITI), Texlon, Aba Textiles, Asaba Textile Mills Ltd, Enpee and Aswani Mills, amongst others contributed over 25 per cent of the workforce in the manufacturing sector. The industry was supported by the production of cotton by 600,000 local farmers across the country.
The death of the sector is quite lamentable in the sense that it was largely due to open conspiracy encouraged by government through unfavourable policies and large scale smuggling.
As at today, about 19 states in the country can conveniently grow cotton. Even when the sector boomed in the 60s and 70s, the operators never sourced raw material, which is mainly cotton, outside the country.
It was basically for this reason that the apex bank’s decision to place a complete ban on access to forex meant for all forms of textile material import and going ahead to direct dealers to desist from granting such importers access to same in any of their windows, was greeted with commendation and seen as a step to put an end to the excessive misuse of the country’s scarce foreign exchange.
Even though the apex bank’s decision might seem to be on the hardline to those who benefit from the detestable arrangement of the past, the fact remains that in a very short while, the gains of every policy will become obvious for all to see.
This has been evident from the position of body of Nigerian major industrialists, the Manufacturers Association of Nigeria (MAN), which said that local sourcing of raw materials by its members had increased significantly.
In effect, what the country suffers today is as a result of mismanagement of resources when it was available in abundance and sustaining same approach to governance even when it was no longer convenient to be committed into the greed of the past.
The CBN is primarily fulfilling its pledge to textile manufacturers to provide them with loans at single digits rate, to refit, retool and upgrade their factories in order to produce high quality textile materials for local and export market.
While the current step being taken by the Federal Government through the apex bank looks good enough to bring back the sector, it should, however, bear in mind that the textile policy that was prepared during the last administration should not be jettisoned as the entire value chain from farm to shop is captured there.
Besides the huge capital flight in an economy that has gone under due to excesses, job losses and closure of small and even large scale industries have also been a big problem to contend with.
As the apex bank delivers on its promise, we advise that the process should be closely monitored and beneficiaries guided so as to ensure that the expected result emerges.
Why we commend CBN for performing its role to ensure the economy bounces back, we also advise other government agencies to initiate programmes that will complement government’s effort to rebuild the country.