Forex prohibition for textile materials to save Nigeria N200bn annually
Nse Anthony-Uko is Abuja editorial lead at business a.m. covering finance, business, economy, federal government economic MDAs and FCT
Nigeria would save no less than an N200 billion yearly going forward following the prohibition of sale of foreign exchange from the official market to importers of textile materials.
Data from the National Bureau of Statistics (NBS) indicated that N168.67 billion worth of textile materials were imported into the country in 2018. A figure that analysts believe would have reached N200 billion or more if it continued in the current year.
The value of imported textile materials has risen by 42 per cent from N114.74 billion in 2016 to N142 billion 2017 and rose by another 31 per cent to N168.67 billion in 2018, according to NBS data. This is besides the cost of smuggled textile materials, which textile manufacturers see as more of a challenge than import from the official channel, which can be easily controlled.
The Nigerian Textile Manufacturers Association (NTMA) estimates an annual bill of US$1.2bn from smuggled textile materials.
The CBN on Tuesday added textile materials to the list of 42 items ineligible for foreign exchange sourced from the official forex market in the country, a move which manufacturers say will fast track the industry’s growth.
Hamma Kwajaffa, director-general of NTMA said inclusion of textile and garments in the foreign exchange restriction list will catalyse rapid growth and development.
Kwajaffa, while lauding the apex bank, said that the restriction would reinforce the various interventions of the Federal Government that had erstwhile been futile in the sector.
“It is an excellent move that will ensure the survival of the remaining textile industry, and it will even encourage more investments in the sector,” he said.
Kwajaffa said that reviving the textile sector to its past glory was vital to the nation’s economic growth and to the government’s job creation objectives.
The CBN on March 5 added all forms of textile materials to its FOREX restriction list to rejuvenate the industry and ensure that the needed growth was actualised.
It also said that it would adopt a range of other strategies that would make it difficult for recalcitrant smugglers to operate banking business in Nigeria.
The apex bank said it would support local cotton farmers through its Anchor Borrowers Programme to enable them meet the needs of the textile industry.