CBN’s decision to exclude textile sector from FX market put ₦5trn investment under threat
The recent decision by the Central Bank of Nigeria (CBN) to exclude the textile sector from the forex market will put over ₦5 trillion worth of investments in jeopardy, the Lagos Chamber of Commerce and Industry (LCCI) has warned.
Besides the threat posed on the ₦5 trillion investments the chamber equally raised the alarm that an estimated 500,000 jobs may also be wiped off.
The chamber in a document titled ‘‘Comments on CBN Forex Exclusion Policy on Textiles’’ made available to Daily Sun at the weekend, lamented that the exclusion of all forms of textile materials from the forex market in both official and unofficial windows would have grave implications for businesses in the fashion, tailoring, fashion accessories and garment industry in the country.
This industry it noted is one of the fastest growing sectors of the Nigerian economy which has created amazing opportunities for many young Nigerians to express their creativity and innovation. The industry provides significant value addition to fabrics, whether imported or locally produced. The policy contemplation of the CBN will put all of these at risk, the chamber regretted. It further argued that trading in textiles is also a major economic activity in the country, both in the northern and southern part of the country because it is a market that responds to changing tastes and fashion trends in the country and beyond. ‘‘Hundreds of thousands of women and men make a living in the marketing of textiles. The policy makers cannot afford to ignore this segment of economic players.
Traders are the bridge between the producers and consumers and it is therefore very important for policy makers to take into account the full ramifications of the consequences of policies and collateral outcomes before implementing them, the Chamber advised
“Today Nigeria is clearly the leader in Africa as far as the fashion industry is concerned. Currently the range of fabrics produced by the Nigerian textile industry cannot support the fashion industry in terms of the quantity and quality. This vibrant industry should not be sacrificed on the altar of textile industry regeneration
This submission is not to diminish the importance of textile industries in anyway or the significance of industrialisation. It is to underscore the importance of a strategic approach to industrialisation,’’ it advised.
On how to reverse the trend of the dwindling fortunes of the textile industry, LCCI posited that the starting point is to strengthen the capacity of domestic industries, enhance their competitiveness, and reduce their import dependence as espoused in the Nigeria Industrial Revolution Plan [NIRP].
More importantly, the chamber said, the epileptic power challenge needs to be addressed because it is almost impossible to achieve rapid industrialisation without resolving the issue of power and deficit in key infrastructure.
‘‘Textile production is energy intensive. This is a high energy cost environment and it is very difficult for any energy intensive sector to survive. The textile industry has been a beneficiary of several fiscal incentives and protectionist measures over the years, yet it has remained in stagnation. Some of them have even gone into receivership as they could not repay their loans. The lesson is that we should deal with the fundamental issues of production competitiveness in our economy.