It is hoped that the recent move by the Central Bank of Nigeria to blacklist bank accounts linked with textile smugglers and the distribution of high-yielding cotton seeds to over 100,000 cotton farmers in Katsina State will boost its production, Francis Sardauna writes
As at the 1970’s and early 1980’s, Nigeria was home to Africa’s largest textile industry with over 180 textile mills in operation which employed no fewer than 450,000 people, representing close to 25 per cent of the workforce in the manufacturing sector then.
Aside jobs creation, this 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 within and outside the country.
The sector supported the clothing needs of the Nigerian populace, as markets were filled with locally produced textiles from companies such as Kaduna Textiles Mill, United Textiles, Supertex Limited, International Textile Industry (I.T.I), Texlon, Enpee and Aswani Mills amongst numerous others textiles factories.
The cloths produced in these factories were highly sought after not only in Nigeria, but in West Africa and indeed in Great Britain. Infact, it got to a point that the industries produced close to half of the cotton clothes in all of West Africa.
However, the story is different today as most of the factories mentioned above have all stopped operations, as only 25 textile factories are operating today, while the workforce in Nigeria’s textile industry presently stands at less than 20,000 people.
Accordingly, the country currently spends about $4 billion annually on imported textiles and ready-made clothing from China and other countries in Europe. In addition, smuggling of textiles goods alone is also estimated to cost the country over $2.2bn annually.
Apart from billions of US dollars spent on importation of textiles, cotton farmers in the country for the past 20 years had been confronted with many challenges ranging from low quality seeds, rising operational cost and weak sales due to high energy cost of running factories, smuggling of textile goods and poor access to finance.
Worried by these predicaments, the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, on assumption of office in June, 2014, in his inaugural speech said one of his cardinal objectives as the CBN governor was to build a people oriented and focused Central Bank with primary focus on macroeconomic such as lower inflation and exchange rate stability.
According to Emefiele, the Central Bank ought to play a more important role in supporting Nigeria’s economic development, given the constraints faced by rural farmers, SMES and Manufacturing companies, adding that “More importantly, we believe that CBN’s intervention which is aimed at import substitution will help in conserving scarce foreign exchange for Nigeria”.
Consequently, President Muhammadu Buhari recently setup a national committee that would revamp the Cotton, Textile and Garment sector comprising the CBN, Federal Ministries of Agriculture and Rural Development; Water Resources; Industry, Trade and Investment; and the governments of Kano, Kaduna, Katsina, Gombe and Zamfara states, to drive the initiative to achieve self-sufficiency in cotton production and textile material within a span of three years.
The committee on May 6, 2019 swung into action by launching the distribution of high-yielding cotton seeds and inputs to over 100,000 cotton farmers in Katsina State for the 2019 planting season.
The farmers who were said to have being cultivating over 200,000 hectares of farmland, according to CBN, will undergo extensive training on farming techniques that would boost cotton production in Nigeria.
Other packages for the beneficiaries includes fertiliser, pesticides and knapsack sprayers. These measures will help to improve cotton production from “80,000 tonnes produced in 2018 to over 300,000 tonnes by 2020” and tackle insufficient cotton seeds that had been identified as one of the major predicament facing cotton farmers.
Bad News for Saboteurs
Speaking at the launch, the CBN Governor revealed that as part of efforts to sustain cotton production and its industries in Nigeria, the bank’s regulator “is currently gathering data about, and investigating the accounts of individuals and corporates currently involved in smuggling and dumping textile materials into Nigeria”.
He added that after the investigation, the names of the individuals and companies would be publicised, just as he stressed 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”.
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 $4billion”, he said.
Emefiele further buttressed thus: “Consequently, the current trend where all our textile materials are imported from abroad must stop. It also means that, we must all join hands to fight and destroy all attempts by unscrupulous persons and companies to continue to smuggle and dump textile and garments into Nigeria.
“In considering the role which this sector plays in our economic development, we must not just consider the fact of productivity but also, we must view the sector from the standpoint that their existence helps in sustaining the vitality of the neighborhoods in which they operate.”
Emefiele, who was supported at the ceremony by Governors of Katsina State, Hon. Bello 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.
Choice of Katsina
According to him, the choice of Katsina was based on the immense potential of the state as the leading cotton producing state in Nigeria, noting that the bank was committed to the revamp of the cotton and textiles industry, given its immense potential to Nigeria’s growth objectives as well as the 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, he stressed 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, 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.
While acknowledging the support and leadership of the president, 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”.
On the restriction of foreign exchange to 43 items, he 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.
Anchor Borrowers Programme
Meanwhile, under the bank’s Anchor Borrowers Programme, the CBN boss said: “We intend to improve the linkage between cotton farmers and ginneries, by ensuring that ginneries are able to offtake the high-quality cotton produced by these farmers. So far 23 ginneries, spinners and several Textile producing firms have been identified and we intend to support them in retooling their processing plants”.
The CBN governor also reaffirmed the Apex Bank’s readiness to provide the textiles producing firms with improved access to finance at single digit interest rate, in order to help sustain their operations and improve their production capacity, adding that: “The same support will be extended to the Yarn spinners and textile weavers and producers”.
Worry over Insecurity
But President Muhammadu Buhari who was represented at the ceremony by the Minister of Agriculture and Rural Development, Chief Audu Innocent Ogbeh, expressed worry over the current insecurity bedevilling the nation, saying kidnapping has now turned to an occupation and industry for the teeming unemployed youths.
Buhari who attributed the insecurity to lack of jobs for the youths was however quick to say revival of the cotton production and the textile industries will help to generate more jobs.
“So our youths, our children have turned to a new industry which is causing fear in the heart of all of us, namely kidnapping, abduction and all kinds of crimes including rustling of cattle. How can we survive when kidnapping is a new occupation and a business? And what is the cause of this situation? Anger and frustration among our youths. The crisis was being burned by the disenchantment and anger among our children.
“The textile industry used to engage close to One and the half million people. The textiles in Kaduna, Kano, Ikeja, Aba disappeared and we became a nation of importer of textiles. Imagine how much we spend importing textile materials. All these are jobs that were here disappeared and the consequences are now what we are seeing, kidnapping, totally unreasonable violence.
“The good news however is we have a Central Bank Governor and his team who have decided that they must innovate and find new ways of supporting the federal government to improve agricultural production”, he explained.
He disclosed that: “Every where in the world, agric credit is about 3 per cent, in Nigeria, for nearly 30 years it is 20 per cent – 25 per cent agricultural interest rate. So there was complete decline in agriculture. We give thanks to CBN for their interventions”.
Hope for the Future
The president reiterated that with the new launch of the distribution of cotton seeds, in a short while, the country would be back among the leading nation’s in textiles production because “we are among the biggest consumers of textiles. Improving on the Nigerian economy will never happen unless and until we revive the agricultural sector”.
Katsina’s Agricultural Restoration Agenda
To complement this giant strides, the Katsina State Government under the leadership of Governor Aminu Bello Masari through its Agricultural Restoration Agenda has since supported the cotton farmers with Infrastructures, incentives, inputs, modern farming implements and financial support as well as creating an enabling environment for agric investors and development partners aimed at allowing farmers to contribute effectively to federal government’s efforts of diversifying the agricultural sector.
This explained why Masari in his remarks at the event, said the decline of agricultural produce including cotton over the years in the state has been a source of concern for his administration “Because the glorious days of cotton production have provided employment to our populace, increased farmers’ income and provided raw materials to industries” engaged in textile production across the country.
He stated, “To revive cotton production, the state government is partnering the Institute for Agriculture Research (IAR) A.B.U Zaria for the conduct of demonstration in 2019 /2020 dry season irrigated cotton production in order to enable farmers to produce cotton all year round. Relevant sites have been selected for demonstration purposes on a pilot basis.
“Since the inception of this administration we have put in place the state’s agricultural restoration agenda developed by well known and experienced professional commercial production, processing and marketing of products both within and outside the state”.
According to the governor, the choice for improved seed of cotton, biotechnology which gives yield of 2.5 to 3.5 metric tonnes per hectare against SAMCOT 9 which gives 1.0 to 1.2 metric tonnes per hectare as introduced by federal government would greatly enhance higher cotton yield for the benefit of the nation.
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 thereby enhancing the economic status of the country.
He, however, expressed optimism that by the end of 2019 wet season, cotton farmers in the state will be busy selling their products to agro-based industries and to commodity dealers for export.
Also speaking on behalf of other state governors Governors in the North-west geo-political zone, the Kano State Governor, equally commended the president 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.