Forex scarcity: Nigeria’s textile industry going extinct

The textile industry in Nigeria may face extinction if the Central Bank of Nigeria (CBN) does not allow the manufacturers access to foreign exchange (forex). The textile manufacturing industry is in crisis with the non-availability of forex for procurement of raw materials. If this situation prevails, few of the manufacturers may suspend production.

The concern was raised by Hamma Kwajaffa, director-general of the Nigerian Textile Manufacturers’ Association (NTMA) in an interview with the News Agency of Nigeria in Lagos. However, it was on November 7, 2016 that CBN had released $660 million to the manufacturers to source raw materials and spare parts, as reported by the Nigerian news agency.

The textile industry is on the brink of crisis, said Kwajaffa, adding that the number of appeals made by the manufacturers for access to foreign exchange also went in vain. In an attempt to allow NTMA members access to forex, Kwajaffa had also called for improved collaboration between the apex bank and commercial banks.

“To access foreign exchange, we have to go through our banks. They 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 for 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.

“Easy availability of foreign exchange will allow textile manufacturers access to procure raw materials, and thus help in enhancing production, resulting in job creation and increased contribution to Nigeria’s gross domestic product,” he added.

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.

Source: Fibre Fashion

x

Check Also

DHL announces title partnership of Africa’s largest e-commerce and fintech event

DHL Express Sub-Saharan Africa (SSA) has announced that the company has signed on as title ...