BREAKING: CBN bans sale of forex to textile importers

The Central Bank of Nigeria (CBN) has directed commercial banks and bureaux de change operators to stop sale of forex for the import of textiles and clothing materials in the country.

Godwin Emefiele, governor of the bank, announced this at a meeting with stakeholders in the cotton sector in Abuja on Tuesday.

He said the restriction was borne out of the federal government’s plan to revive the textile sector and create employment for millions of Nigerians.

“The CBN hereby place the access to FX for all forms of textile materials on the FX restriction list,” he said.

“Accordingly, all FX dealers in Nigeria are to desist from granting any importer of textile material access to FX 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. The details of those strategies will be unfolded in due course.”

The CBN governor highlighted how Nigeria gained from the booming textile industry that was characteristic of the 1970’s and early 1980’s, narrating the effect of “rising operating cost and weak sales due to high energy cost, smuggling of textile goods, and poor access to finance.”

He said Nigeria currently spends above $4 billion annually on imported textiles and ready-made clothing with a potential market size well over $10bn annually.

Emefiele said with the new restriction, sourcing of FX for textile importation and even smuggling will be next to impossible, adding that this will “support the revival” of the sector.

He added that the bank will support local growers of cotton, provide stable electricity and build textile production centers across the country which will meet the needs of the entire value chain.