Nigeria’s dependence on textile importation led to the shut down of many textile companies which, in turn, caused retrenchment in the textile industry. This is according to the Governor, Central Bank of Nigeria, Godwin Emefiele.
Mr Emefiele stated this while responding to the statement by the Director General of the Lagos Chamber of Commerce and Industry (LCCI), Mr Muda Yusuf, who criticised the CBN for placing FX ban on textile importation.
Nairametrics had reported that the textile material is the latest product to be restricted by the apex bank from accessing its foreign exchange. The CBN said this was done to improve the demand of local textile within the country.
The restriction on textile importation was announced by the Governor of CBN, Godwin Emefiele, during a meeting with textile manufacturers, and cotton farmers at the bank’s headquarters, in Abuja.
LCCI criticism
Mr Muda Yusuf had argued that before such policy is executed, there is a need for a strategic approach. He said the Federal Government needs to strengthen the capacity of domestic industries, enhance their competitiveness, and then reduce their import dependence as espoused in the Nigeria Industrial Revolution Plan before placing making such policy.
He said the FX ban could affect Nigeria’s position in the Fashion industry which Nigeria leads. Yusuf defended his assertion with the range of fabrics produced by the Nigerian textile industry, which could not support the industry in terms of the quantity and quality.
Emefiele’s response and rebuttal
In his response, the Governor of Central bank said the policy will revive the Cotton, Garment and Textile sector, as the old way is not improving the standard of the textile sector, neither is the duty on textile effective to stop the increase in importation.
He counter-argued the call for a strategic approach, stating that the approach led to the closure of the 180 textile mills in Nigeria, a number that has declined to 15 textile companies, according to Emefiele.
“The issue he raised here is that we need to have a strategic approach to the measures. Whereas one will agree with his view on strategic approach, but I begin to wonder what Muda means when he talked about strategic approaches.
“In the past, the country has adopted what he calls a strategic approach and that strategic approach to my understanding is that he seems to say allow them to continue to import, let them continue to dump, let them continue to smuggle into the country, they will build these factories and industries.
“When we address these issues three weeks ago, I had said that at a time in this country, Nigeria had 180 textile mills, today they are dead. Three weeks ago when we held a meeting, there were only 15 textiles companies out of the 180 in the 50s and 60s in the country.
“Jobs have been lost, and that is why we know that while there is unemployment in our country, we ignore an industry that is the largest employer of labour after the public sector.
“The strategic approach had never worked. I want anybody to quote me; it has never worked. What is the policy we are talking about? Increase in duty. Today, duty on textile is 45 per cent.”
