CBN to Blacklist Bank Accounts Linked with Textile Smugglers

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Godwin Emefiele

Francis Sardauna in Katsina

The Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, has said the apex bank is currently gathering data about, and investigating the accounts of individuals and corporate organisations involved in smuggling and dumping textile materials into Nigeria.
Emefiele warned that after the investigation, the names of the individuals and companies involved would be publicised, stressing that persons or organisations found culpable would be blacklisted and all the banks in Nigeria shall be barred from conducting any banking business with the companies, their owners and top management.

The CBN governor said this yesterday when he launched the commencement of the distribution of cotton seeds and other inputs to over 100,000 cotton farmers in Katsina State for the 2019 farming season, with the aim of reviving Nigeria’s cotton, textiles and garments sector and also increasing cotton production from 80,000 tonnes produced in 2018 to over 300,000 tonnes by 2020.

He said the investigation would also be extended to the 43 other items restricted from forex in Nigeria.
“Today, Nigeria currently spends about $4 billion annually on imported textiles and ready-made clothing. With a projected population of over 190 million Nigerians, the needs of the domestic market are huge and varied, with immense prospects for growth of the domestic textile industries.

“One quick example that highlights the potential of this local market, includes the need to support provision of uniforms and clothing apparels for students, military and paramilitary officers as well as workers in the industrial sector. In addition, when we consider the amount spent on outfits for religious and social events such as weddings, naming and funeral ceremonies on a weekly basis, the potential market size is well over $4 billion,” the CBN governor added.
Emefiele, who was supported at the ceremony by the Governors of Katsina State, Hon. Bello Masari, and Kano State, Dr. Abdullahi Ganduje, as well as the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, also reiterated that the forex restriction on finished textiles and other 43 items remained in force.

He said the CBN had identified insufficient cotton seeds as one of the major challenges facing cotton farmers, hence the apex bank sought to change the narrative on the cotton and textile industry in Nigeria through the distribution of high yielding cotton seeds to farmers.
According to him, the provision of seedlings to more than 100,000 farmers cultivating over 200,000 hectares of farmland, along with extensive training on proper farming techniques, will boost production of high grade cotton lint at much improved yields of up to four tonnes per hectare, from the current cultivation rates of less than one tonne per hectare.

He further disclosed that the choice of Katsina was based on the immense potential of the state as the leading cotton producing state in Nigeria. He also noted that CBN was committed to the revamp of the cotton and textiles industry, given its immense potential to Nigeria’s growth objectives as well as the apex bank’s efforts at creating jobs for a large number of Nigerians.

Recalling the glory days of the textile industries in Nigeria in the 1970’s and early 1980’s, Emefiele noted that Nigeria was home to Africa’s largest textile industry, with over 180 textile mills that employed over 450,000 people, representing about 25 per cent of the workforce in the manufacturing sector.
He also recounted that the industry was supported by the production of cotton by 600,000 local farmers across 30 of Nigeria’s 36 states, thousands of ginnery workers who processed the cotton from farmers, and a large number of distributors that sold the finished cloths to consumers.

He, however, expressed regrets that farmers and processors have had to deal with low quality seeds, rising operating cost and weak sales due to high energy cost of running factories, poor access to finance and smuggling of textile goods, which he estimated cost Nigeria over $2.2 billion annually. He lamented that only 25 textile factories were currently operating in Nigeria with a workforce of less than 20,000 people, stressing that a large proportion of clothing materials were now being imported from China and countries in Europe.

While acknowledging the support and leadership of President Muhammadu Buhari, he said the bank had placed considerable emphasis on addressing impediments to the growth of Nigeria’s agricultural and manufacturing sectors, as both sectors represent over 52 per cent of Nigeria’s GDP.
“If we are able to drive productivity gains in these sectors, it will undoubtedly translate to higher growth rate for the broader economy, result in increased rural incomes, and improvements in living standards for a majority of Nigerians,” he noted.

On the restriction of foreign exchange to 43 items, Emefiele said the measures taken by the CBN were yielding the desired results and had helped in driving interest by potential investors who are seeking to make investments to support improved production of textiles in Nigeria.
“With a population of over 190 million people, Nigeria clearly stands out as a virgin market that must be tapped. If we are serious or determined in our drive to create jobs on a mass scale and reduce youth restiveness in Nigeria, the cotton, textiles and garments industry cannot be ignored,” Emefiele added.
He, therefore, urged all hands to be on deck to harness the potentials in the agricultural sector.

In his remarks, Masari said the federal government’s initiative to promote cotton production under the Anchor Borrowers’ Programme of the CBN was a welcome development as such would support the textile industry in the country by encouraging local production.
Also speaking on behalf of other state governors in the North-west geo-political zone, Ganduje equally commended President Buhari for the administration’s effort in agricultural development. While lauding the CBN for its initiatives, Ganduje stressed the need for strong institutions to complement monetary and fiscal policies aimed at developing the Nigerian economy.