CBN and textile industry revival

The Central Bank of Nigeria’s (CBN’s) recent strategic move to revive and grow Nigeria’s cotton, textile and garments economic sector and to improve domestic production of cotton from about 80,000 tonnes in 2018 to 300,000 tonnes by 2020, is one of the economic news items that should not be ignored.

The policy instrument is aimed at addressing a shocking revelation that Nigeria has been spending a whopping N1.23 trillion worth of textile import bill yearly. This is clearly unacceptable.

To address this development, CBN was reported to have, in Katsina State, launched the distribution of high-yield cotton seeds to more than 100,000 farmers cultivating over 200,000 hectares of farmland. The apex bank additionally, provided such supportive farm inputs as fertilisers and pesticides, among others. The provisions are for the 2019 farming season. 

Given the need for the success of the programme, a National Committee comprising representatives of CBN, Ministry of Agriculture and Rural Development, Federal Ministry of Water Resources, Federal Ministry of Industry, Trade and Investment, governments of Kano, Kaduna, Katsina, Gombe and Zamfara states has been set up.

The committee’s responsibilities include ensuring that farmers who benefit from the CBN intervention comply with whatever rules and guidelines that govern the scheme and to ensure Nigeria’s self-sufficiency in cotton production and textile materials within five years from 2019.

Ultimately, it can be stated that the success or otherwise of the scheme has been put on the shoulders of the significant committee.

It is encouraging that CBN identified not only the need for the revival of the textiles and garments sector of the economy but has also taken bold steps towards achieving that. The importance of that sector can hardly be a subject of argument.

As CBN reportedly captured, prior to the sector’s slide from grace to grass, there were about 180 textile mill companies in the country.

Jointly, they provided employment to about 450,000 people, contributing about 25 per cent of the workforce in the entire manufacturing sector of the country. For instance, some of our active labour and even political leaders are products of the once prosperous textile industry.

Unfortunately, the sector lost steam, no thanks to a multiplicity of adverse factors including smuggling of textiles and finished clothes into the country, high cost of production occasioned mainly by high energy/power costs, and an insufficient quantity of cotton resulting from low yielding cotton seeds.

With this CBN’s intervention, it will be most desirable for the cotton, textiles and garments sector to bounce back. This promises enormous benefits. For instance, the number of farm hands will increase; more high quality cotton will be produced and enough raw materials made available to keep factories/mills productively busy; more factory hands will be needed and employed; high quality textiles and garments will be produced from the high quality cottons and thus, the craze for imported alternatives will therefore abate.

What is more, capital flight will be significantly reduced and the country’s foreign exchange reserves will be enhanced. It is also foreseeable that Nigeria can become a net exporter of cotton, textiles and garments especially as the expected new status and capacity of the sector will attract more investors who will expand production further. 

But more important, efforts of CBN through the intervention scheme can be sabotaged if smuggling is not curbed. It is imperative therefore, that the Nigeria Customs should be given marching orders to police the borders effectively – to prevent smuggling. In the main, when the country becomes a net exporter of cotton, textiles and garments, smuggling will be wiped out or drastically reduced without any major threat to the economy.

As CBN has commenced this intervention meant to revive and grow the cotton, textile and garment sector in the country, it is auspicious that the apex bank discloses information on such issues as: the length of time it will take the bank before it exits from the programme. The fund that has been set aside for the period of the programme and the timelines should be explained. Cost of the already provided cotton seeds and other inputs; the overall number of farmers being targeted to benefit from the programme should be disclosed.

Provision of these and other relevant information will be in the interest of ‘’full disclosure’’ and even aid subsequent appraisal of outcome of the programme.

All told, this bold initiative by the CBN and the resources being deployed and applied to it must not be allowed to go down the drain. It is therefore, necessary for comprehensive policies, rules and guidelines to be developed and put in place.

The participating farmers and other relevant stakeholders who have contributions to make towards a successful outcome, must be given needed practical training and empowerment. Implementation should be carried out within the policy framework, guidance rules and regulations. Periodic reviews/evaluations must be undertaken. Corrective steps should be taken when and where necessary and of course, deterrent sanctions must be instituted and applied on individuals and organisations who may dispose themselves to sabotaging, stalling or derailing this enterprise. It may be necessary for CBN to consider looking beyond governments in composing the National Committee charged with the realisation of the lofty objectives.

Finally, this is one programme that should not be seen as or allowed to be ‘’business as usual.’’

It is important that from the outset, there are established ways and criteria by which the committee and leaders who are mandated to oversee it to success, must be appraised and held accountable. This is critical because since the beginning of this democracy, we have seen such policy instruments backed with huge funds for this kind of revival effort and no one has been punished for failing the nation, in this regard!