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Why Emefiele is right on importation ban

By Cletus Adole
21 July 2015   |   12:12 am
NOT many Nigerians remember that decades ago, the Apapa Mile 2 road in Lagos was one of the most vibrant economic hubs in the country. It played host to a lot of textile factories that provided employment to a large number of skilled and unskilled workers. These jobs assured decent wages which enabled the workers…
EMEFIELE-G

Godwin Emefiele, CBN Governor

NOT many Nigerians remember that decades ago, the Apapa Mile 2 road in Lagos was one of the most vibrant economic hubs in the country. It played host to a lot of textile factories that provided employment to a large number of skilled and unskilled workers. These jobs assured decent wages which enabled the workers to provide food for their families, send their children to schools, pay hospital bills and also provide some level of support to their extended families. Unskilled workers were by far in the majority, given the manual nature of the industry and this helped to keep youths away from the streets and reduced crime.

Today, the Apapa-Mile 2 Road is famous, only for traffic logjams and tankers. The factories are mostly gone, along with the jobs they provided. And in the place of these productive activities that provided a source of livelihood and helped to strengthen our economy, we have warehouses that when not empty are now store houses for imported and smuggled fabrics.

The shift in the pattern of activities on this ever busy Apapa Mile 2 Road perfectly illustrates the sad tale of a once thriving Nigerian textile industry.  This is an industry which had grown and in the early 1980s had become the third largest in Africa, with over 160 vibrant textile mills and over 500,000 direct and indirect jobs, according to a report by the Nigerian Textiles Manufacturers Association of Nigeria (NTMAN). Research also shows that the country actually accounted for over 60 per cent of the total textile industry capacity in West Africa then. The ban on textile imports after the civil war had attracted serious international investors, especially the Chinese, to invest into the sector. The speed of growth in the industry was so sharp that by 1985, there were about 180 textile mills in the country, providing direct and indirect employment for over a million Nigerians.

However, massive smuggling and flooding of the market with inferior imported products forced investors to divest to other lines of business while others leased their premises to other companies. Some of the companies like Aswani Textile leased its premises to Chellarams, a manufacturer of dairy products. Afprint, went into the oil manufacturing and car business and Enpee Industries is now into the packaging industry. Even though Obasanjo’s 2004 ban on textile imports still applies, it has failed at closing our porous borders to the influx of cheap fabrics by smugglers. Facts have shown that over 80% of textiles in the country are smuggled in.

During the 2013, Kaduna trade fair, the then Indian deputy high commissioner to Nigeria had revealed that we imported textile products worth N21 billion within one year from his country. According to the World Bank, the value of textiles smuggled into Nigeria through Benin is worth $2.2 billion a year while local Nigerian production has shrivelled to a mere $53 million annually. Today, this once vibrant industry, which was the pride of the nation, the envy of the world, is now only a scary shadow of itself.

When most of these textile industries folded up in the 1980s and 1990s under the pressure of unbridled importation and smuggling, they ended jobs in the hundreds of thousands and sentenced the large number of Nigerians into the jobless market. Their collapse, in fact, meant the end of bread on the table, financial security and support for both immediate and extended families for those whose breadwinners were affected.

In spite of this historical reality, we appear not to have learnt any lessons from the devastating effects this inclination has had on the lives, dreams and destinies of millions of our fellow countrymen. Imports of all sorts have continued to flood our markets from Asia, Europe and even smaller African countries like Ghana, South Africa; in the process effectively suffocating the capacity of our local industries to thrive and create jobs.

It is because of this negative trend that the recent policy of the CBN Governor to stop providing forex for the importation of some select items which include amongst others, toothpicks, clothing, rice, palm oil products, cement, poultry, and processed meat is important, timely and should be supported by all well-meaning Nigerians. These are goods that we have the climate and the resources to produce locally and it is a shame that we import them. After Independence, Nigeria was a leading exporter of palm kernel, and largest producer and exporter of palm oil in the world. The trade provided jobs to many local people, enhanced the living standards of the farmers and also helped to grow the local economy. Today, from being the largest producer of oil palm, Nigeria is now a net importer of palm oil. Malaysia, a country Nigeria gave palm oil seedlings to, has overtaken Nigeria as one of the largest producers and leading exporters of palm oil in the world.

The truth is, when we import these items, we unwittingly export jobs and investments to those countries while fuelling a system that perpetuates misery and poverty for our country. The CBN Governor while throwing light on the rationale behind the policy had said that ‘Nigeria cannot attain its full potential by simply importing everything. At some point we have to all decide what we really want for our country and I believe the time is right now for that honest and deep conversation’.

The governor’s position cannot be faulted. We are all involved at our various individual capacities. Sustainable growth is organic, built on a strong local industry and supported by the collective pride of citizens in what is theirs. This, of course, is the path that the developed countries like the U.S., UK, Germany, China and Singapore all took to attain the economic heights that we now envy. No country has ever made progress by importing all of its needs and providing a big market for imported products.

Although we envy the economic prowess of the United States and United Kingdom, celebrate the success of the Asian tigers, laud the industry of the South Koreans, everything we do, first as individuals and collectively as a nation keeps pointing to the opposite direction of what these countries did in order to attain the developments we so admire.

All patriotic Nigerians should support the policy of the Central Bank that seeks to restrict access to forex for goods that could be produced locally. When we make deliberate decisions to buy foreign rice instead of local rice, we deny those local farmers their right to a fair price as reward for their sweat and hard work. When we patronise foreign clothing, we deny local stakeholders in the textile industry the much needed patronage they really desire to grow, expand, create jobs and build further resilience in the industry. What this means is that each one of us is to some degree responsible for the human misery which has become the lot of our farmers, other Nigerian workers – and, ultimately, ourselves.

• Adole is a public policy and finance analyst based in Lagos 

2 Comments

  • Author’s gravatar

    My broda, a country whose leaders who came into governance on the basis of change, who can suddenly in spite of current economic realities sell out dollars at #160 naira to religious pilgrims with no economic benefit to this country, such leaders cannot & will not lead us to the much needed progress. Until they emulate the Asian tigers & the European power houses by taking the difficult but necessary decisions, the progress of this country will never leave the drawing board. Right now, those who should get us out of this mess are engaged in popularity contest. Pity our beloved country.

  • Author’s gravatar

    You ask the question which i want to ask