By Our Editors
The cotton value chain in Nigeria once created employment opportunities for well over 450,000 people and supported 180 textile mills. A combination of sustained streams of policy somersaults, if not failures, blighted the glorious days of the 1970s and early 1980s with a devastating impact on the sector especially its capability to contribute to Gross Domestic Product (GDP).
Curiously, a once thriving local cotton and textile industry succumbed to the negative effect of the influx of cheap and heavily subsidised brands as the country became a dumping ground for textile materials of doubtful quality especially from Asia. Cotton farmers, ginneries and textile factories, with time, fizzled out as a result of their inability to withstand the pressure from foreign competition made worse by the preference of Nigerians who had cultivated a taste for not just foreign textile products but also virtually every item including biscuits and apples. The fad was reinforced by the readily available petro-dollar.
Somehow, the governments of that era did not take full cognizance of the damage been done on the economy as a whole. Or maybe they did not know how to apply the measures urgently needed to reverse the disturbing trend. That was the situation until four years ago when Mr Godwin Emefiele took over as the helmsman at the Central Bank of Nigeria (CBN).
It took an extraordinary courage of a man determined to confront the monster that was depleting the nation’s external reserves and more so those benefitting from the mind-boggling exercise that was bleeding the country to death. Stopping the ugly trend became part of his policy directed at making Nigeria a net producer of cotton again and restoring her position as a big player in the cotton value chain.
At a Cotton, Textile and Garment (CTG) stakeholders meeting recently tagged: Cotton Harvest 2020 Season, the CBN disclosed that in four years, it has invested in excess of N120 billion in the cotton sector. It takes such a huge investment to revive a once vibrant sector which had been made to lie prostrate on its belly. This commendable intervention is part of the apex bank’s commitment to eradicating smuggling and dumping of textile goods in the country. It is also striving to resuscitate and return the lost glory of the sector. Similarly, it is a concerted effort to reactivate its employment potentials, make it contribute to the country’s revenue drive and, even more importantly, plug the loopholes exploited by unpatriotic Nigerians to drain the nation’s foreign reserve.
Emefiele’s policy thrust was and still is to revamp the sector by supporting farmers to cultivate quality cotton lint being the major raw material for the industry. However, in the opinion of this newspaper, a lot has been achieved in the sector since the policy was rolled out over the last few years. But even as the apex bank itself acknowledged, much still needed to be done to restore the sector to its pristine days.
As the effort persist, we consider it pertinent to point out that between 2018 and 2020, the cotton sector which forms part of the Anchor Borrowers Programme (ABP), has been able to engage well over 340,000 farmers who were also able to earn for themselves a whopping N31.6 billion.
Another observable positive impact of the policy is that 12 ginneries were funded under CTG intervention scheme within the period under review which put them in a position to create 450,000 jobs. Furthermore, because funding was readily available, the capacity of the ginneries increased exponentially making it possible for cotton lint produced to outweigh the annual requirement of the textile companies not minding the outbreak of COVID-19 and its negative effects on socio-economic life of the country.
We recall that the CBN had added textile on the list of items to be denied access to official foreign exchange window. So, it is not a surprise, in our view, that cotton importation was at zero per cent in 2019. Concomitantly, cotton seeds’ farming is thriving as ginneries are supplying textile companies with enough raw materials to keep them in business.
In our considered opinion, the Emefiele policy has significantly achieved its aim as smuggling of textile has reduced, job creation in the sector is rising steadily and the exploitation of the value chain in the sector is being harnessed satisfactorily since the intervention. Also, the country is no longer wasting as much scarce foreign exchange on the importation of cotton and its derivatives.
Considering the ingenuity and the diehard propensity of the average Nigerian smuggler, and in spite of the risks involved as well as the challenge of sourcing foreign exchange in the black matter, the business is still on. What this means is that other agencies of government like the Customs Service has more to do to assist the CBN in its determined effort to salvage the CTG sector. It can be done.