CBN raises hope on textile industry financing
The Central Bank of Nigeria (CBN) at the weekend in Lagos, raised the hope that the nation’s ailing textile industry would receive full attention of the institution as part of efforts to support the economy.
The CBN Governor, Godwin Emefiele, who gave the assurance in a meeting with the cotton, textile and garment industry stakeholders in Lagos, noted that it was important for the operators to come up with holistic solutions for the long term sustainable development of the industry.
He decried the state of the industry that once had over 150 vibrant textile mills close to full production capacities and over one million employment- second to government, became dominated now by importation.
Recently, the apex bank included textiles as one of the 41 items not valid for foreign exchange at the official foreign exchange window.
Meanwhile, the Bankers Committee, at its 323rd Meeting, in Lagos at the weekend, said the publications of delinquent debtors would be sustained, until the debts are cleared.
Mr. Kolawole Balogun, who represented the Director of Banking Supervision, CBN, Mrs. Tokunbo Martins, at the meeting, said the publications would now be on quarterly basis, though some banks have indicated interest to be publishing on monthly basis.
The sustenance of the exercise would also help to capture emerging bad debtors, as well as review the position of some whose status on the list would have changed.
However, the committee noted that the coast is now set for the application of the sanctions to the chronic debtors.
The sanctions, according to the April meeting of the committee, include non-access to foreign exchange at the official window for the companies and their directors; listing of their names at the credit bureaus, among others.
They also reiterated that the ban of dollar cash deposit into domiciliary accounts remains in force, but noted that every other transactions can be done through the same account.
Assuring that CBN, through the banks, will continue to meet foreign exchange obligations that are genuine needs, the Managing Director of Guarantee Trust Bank, Segun Agbaje, said there is no need for panic by the public.
“The operations of domiciliary account still remain the same. The only thing that has changed is the payment of cash into it. Those with domiciliary accounts will continue to pay school fees, medical bills and do other legitimate transactions through the CBN window in the banks,” he said.
Speaking further on the ailing textile industry, Emefiele said that the more worrisome development in the sector is that it is now creating jobs for the exporting countries, leaving Nigeria with huge capital flights in the form of millions of dollars demanded at the foreign exchange market.
“India alone estimated to export textile products worth over $140 million into Nigeria, while imports from China, Indonesia and Taiwan are more likely to be even much higher. The challenge for us as stakeholders is how to prevent further dumping of the product into the country with the implementation of the Common External Tariff,” he said.
The Chairman of textile industry group, Mrs. Grace Aderanti, lamented that the industry, which created huge jobs for the country directly and indirectly, is currently left with less than 20 textile companies and 50, 000 jobs.
According to her, about 95 per cent of textile products were import, alleging that most of the imported items are smuggled, not properly cleared.
She pointed out that the country has the capacity of producing 1.5 billion metre of cotton, but that unstable political environment, policy somersaults, massive and unfettered smuggling of substandard Asian products into the country, high production costs due to obsolete machineries, low level technologies and poor state of the country’s infrastructure, especially power, are assailing their efforts.