Business Hilights
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Banks, CBN moving opposite directions on forex access—-NTMA

Indications have emerged that money deposit banks and the Central Bank of Nigeria (CBN) may not have been on ‘the same page’ on issues bordering on access and availability of foreign exchange, Business Hilights, can authoritatively report.

Yesterday, the Nigerian Textile Manufacturers’ Association (NTMA) raised alarm that the industry would face extinction unless the apex bank would allow manufacturers access to foreign exchange.

But the CBN had on November 7 said that $660m was released to manufacturers through the inter-bank market to source raw materials and spare parts.

The Director-General, NTMA, Mr. Hamma Kwajaffa, gave the warning, saying CBN has not allowed NTMA members access to forex.

While expressing fears that the industry is on the brink of crisis as the few existing textile manufacturers are set to suspend production due to non-availability of forex for procurement of raw materials, he decried that upon all the directives and claims by the CBN, no textile manufacturer had accessed foreign exchange, 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.”

He said the government is finding it hard to make a categorical statement on what plans it has for the textile industry and the scenario is not only hindering production but also efforts at revitalising the textile industry.

According to him, “At the peak of the economic boom in the early 80s, Nigeria had 84 textile mills, today, 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 argued that time has come for both the CBN and commercial banks to be on the same page whenever directive will be issued so that people will not be cajoled going to bank to remind the bank what government has said concerning certain businesses.