Nigeria: CBN Imposes Forex Restriction On Textile Imports, Unveils Measures to Revamp Industry

Photo: Pixabay
(file photo)
6 March 2019

The Central Bank of Nigeria (CBN) has imposed foreign exchange restriction on importation of textile and textile materials into the country.

Consequently, importers of textile and textile materials would not be able to purchase foreign exchange from banks and bureaux de change as well as other operators in the official foreign exchange market.

The CBN Governor, Mr.Godwin Emefiele, announced the forex restriction at a meeting with textile manufacturers, and cotton farmers at the bank's headquarters, in Abuja, yesterday.

He directed that banks and Bureaux de Change must stop selling foreign exchange to such importers, with immediate effect.

According to him, discouraging textiles imports was key to revamping the local industry.

He also said that operators in the sector would be granted loans at single-digit interest rates, as part of the renewed intervention.

In addition, the loans granted the operators by the Bank of Industry would be restructured, to ease their re-payment terms.

CBN to sustain aggressive liquidity mop-up as DMO auctions N60bn bonds

Emefiele said: "We have decided to implement a few steps which we believe will support the revival of the textile sectors. These steps include:

"Financial support to Textile manufacturers with the provision of funds at single digits rate, to refit, re-tools and upgrade their factories in order to produce high quality textile materials for the local and export market

"Effective immediately, the CBN hereby place the access to forex for all forms of textile materials on the forex restriction list. Accordingly, all forex dealers in Nigeria are to desist from granting any importer of textile material access to forex in the Nigerian Foreign exchange market. In addition, we shall adopt a range of other strategies that will make it difficult for recalcitrant smugglers to operate banking business in Nigeria."

Emefiele said that the CBN would initially support the importation of cotton lint for use in textile factories, with a caveat that such importers shall begin sourcing all their cotton needs locally beginning from year 2020.

"As part of its Anchor Borrowers Program, the CBN will support local growers of cotton to enable them meet the needs of the textile industries in Nigeria. The CBN shall also support efforts to source high yield cotton seedlings so as to ensure the yields from our cotton farmers meet global benchmarks," he explained further.

In order to tackle the problem of power supply, the CBN boss promised to assist in creating Textile Production Centers in designated areas in the country where access to electricity would be guaranteed.

Treasury bills issuance

Meanwhile, the CBN yesterday said that it will issue N503 billion worth of Treasury Bills (NTBs) in the next three months up to May 30, 2019.

The apex bank disclosed this in its second quarterly NTBs Issuance programme released yesterday.

The TB issuance which represents the amount of bills that will mature during the period, consist of N79.6 billion worth of 91 days bills; N152.8 billion worth of 182 days bills and N270.7 billion 364 days bills.

The issuance programme showed that the apex bank will issue N138 billion in the first two weeks of March, comprising N8 billion worth of 91 days bills, N22.3 billion worth of 182 days bills and N107.7 billion worth of 364 days bills.

In April, CBN will issue N154.3 billion worth of bills, comprising of N15.9 billion worth of 91 days bills, N46.9 billion worth of 182 days bills, and N91.5 billion worth of 364 days bills.

In May, the apex bank plans to issue bills worth N211 billion which include N55.8 billion worth of 91 days bills, N83.6 billion worth of 182 days bills, and N71.6 billion worth of 364 days bills.

See What Everyone is Watching

More From: Vanguard

Don't Miss

AllAfrica publishes around 600 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.