CBN Bans Forex For Textile Materials As Sector To See Boom

The Central Bank of Nigeria (CBN) has banned sales of forex to importers of textiles and clothing materials in the country.

The CBN governor, Mr Godwin Emefiele, announced the restriction while speaking on how to revive the country’s textile industry on Tuesday in Abuja during a meeting with stakeholders in the cotton sector of the economy.

Emiefele, who stated that Nigeria currently spends above $4 billion annually on imported textiles and ready-made clothing with a projected population of over 180 million Nigerians, further urged stakeholders to think on steps the nation can take to best provide operators in the textile industry with the support they need to revive their factories and expand job opportunities.

However, the apex bank said one of the steps it has taken to cause a boom in the textile industry, is its ban on forex “for all forms of textile materials.”

“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. The details of those strategies will be unfolded in due course.”

According to Emefiele, the CBN has also resolved to support “Textile manufacturers with the provision of funds at single digits rate, to refit, retool and upgrade their factories in order to produce high-quality textile materials for the local and export market.”

He gave other strategies being implemented by the apex bank to boost the textile sector in the country as the initial support of “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 the year 2020.

“As part of its Anchor Borrowers Program, the CBN will support local growers of cotton to enable them to meet the needs of the textile industries in Nigeria. The CBN shall also support efforts to source high yield cotton seedlings so as to ensure the yields from our cotton farmers meet global benchmarks.

“As regards provision of stable electricity, the CBN shall support the creation of textile production centers in certain designated areas in Nigeria where access to electricity shall be guaranteed. In 2016, the CBN began discussions with the Kano and Kaduna State Governments to establish textile industrial areas in a bid to guarantee stable electricity in those industrial areas. We would intensify efforts with these governments and others that may show keen interest to see to the quick actualization of such programs.”