‘Exclusion of textile materials from forex market has grave implications in Nigeria’


The Director General of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf has condemned the recent exclusions of textile materials from foreign exchange market policy by the Central Bank of Nigeria (CBN).

Muda in his comments on CBN forex exclusion policy on textiles said, the recent pronouncement by the CBN on the exclusion of all forms of textile materials from the forex market in both official and unofficial windows has grave implications for businesses in the fashion, tailoring, fashion accessories and garment industry in the country.

He said, the industry is one of the fastest growing industries in Nigeria and has created amazing opportunities for many young Nigerians to express their creativity and innovation.

“The sector is estimated at N5 trillion, creating about 500,000 jobs.  The industry provides significant value addition to fabrics, whether imported or domestically produced.  The policy contemplation of the CBN will put all of these at risk.”

He noted that, trading in textile industry is a major economic activity in the country, both in the northern and southern part of the country, saying, 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. The traders are the bridge between the producers and the consumers. It is therefore very important for policy makers take into account the full ramifications of the consequences of policies and collateral outcomes.

Today Nigeria is clearly the leader in Africa as far as the fashion industry is concerned”, he said.

He stressed that, the range of fabrics produced by the Nigerian textile industry cannot support the fashion industry in terms of the quantity and quality saying; the vibrant industry should not be sacrificed on the altar of textile industry regeneration.

He said the submission is not to diminish the importance of textile industries in any way or the significance of industrialization, it is to underscore the importance of a strategic approach to industrialization.

“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 power issue needs to be addressed.  It is almost impossible to achieve rapid industrialization without resolving the issue power and the deficit in key infrastructures. 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. The textile industry needs to be saved from the excruciating burden of high operating and production cost.”

Muda stated that, compelling the citizens to pay exorbitantly for systemic inefficiency is not an appropriate policy option.

He stated that, such disposition imposes high welfare cost on the citizens, promotes unethical practices in the economy, promotes the growth of underground economy, leads to loss of revenue to government, and results in job losses.

The key to sustainable industrialization is to focus on competitiveness, anchored on resource-based industrialization, robust incentives and concessions should be made available to our industrialists’ he said.