By Andah John with agency reports
Unless the Central Bank of Nigeria allows manufacturers access to foreign exchange, the textile industry could face extinction.
That is the submission of the Nigerian Textile Manufacturers’ Association (NTMA).
The association’s Director General Hamma Kwajaffa gave the warning in an interview with the News Agency of Nigeria on Monday in Lagos.
Kwajaffa said the industry is on the brink of crisis as the few existing manufacturers are set to suspend production. They attributed it to non-availability of forex for procurement of raw materials.
The CBN had said in November that $660 million was released to manufacturers through the inter-bank market to source raw materials and spare parts.
Textile manufacturers bemoan lack of access
But he said no textile manufacturer had accessed foreign exchange. And it comes in spite of the numerous letters of credit by them.
“To access foreign exchange, we have to go through our banks. But our banks keep telling us that they do not have foreign exchange to give.
“The situation has impeded our production activity because most of our production components cannot be sourced locally.
“By now, many companies ought to have fabrics in the market against Christmas season but they cannot do that.
“Some of the manufacturers have already stopped production, and it is becoming difficult to convince others not to suspend production,” Kwajaffa said.
No forex, no production
According to the director general, the foreign exchange challenge is not only hindering production but also efforts at revitalising the textile industry.
“At the peak of the economic boom in the early 80s, Nigeria had 84 textile mills. The number has dropped to 24 now.
“The workforce in these industries nationwide has also been reduced from 250,000 to about 20,000.
“Worried about the situation, government has been making frantic efforts through consultations and intervention funds to revive this ailing sector.
“But the present situation might cripple all efforts geared towards injecting life into the industry.
“A lot is at stake if the present situation is not addressed urgently,” he said.
Kwajaffa called for improved collaboration between the apex bank and commercial banks in the allocation of foreign exchange to manufacturers.