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Exclusion of textile importers from FX market will hurt fashion designers—LCCI

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The Lagos Chamber of Commerce and Industry (LCCI) says exclusion of all forms of textile materials from the foreign exchange market in both official and unofficial windows has grave implications for businesses in the fashion, tailoring, fashion accessories and garment industry.

The chamber is reacting to the recent pronouncement by Central Bank of Nigeria (CBN) placing a restriction on the sale of foreign exchange to importers of textiles and other clothing materials in the country.

In a statement, Muda Yusuf, director-general, LCCI, said the fashion and design industry was one of the fastest growing sub-sectors, creating many opportunities for young Nigerians to express their creativity and innovation.

He said the sector was estimated at N5 trillion and had created about 500,000 jobs, providing significant value addition to fabrics, whether imported or domestically produced. “Trading in textiles is a major economic activity in the country, both in the northern and southern part of the country,” Yusuf said. “It is a market that responds to changing tastes and fashion trends in the country and beyond. Hundreds of thousands of women and men make a living in the marketing of textiles. The policy makers cannot afford to ignore this segment of economic players,” he cautioned.

He stated that the traders were the bridge between the producers and the consumers, urging policy makers to take into account consequences of policies and collateral outcomes.

“Today, Nigeria is clearly the leader in Africa as far as the fashion industry is concerned. Currently the range of fabrics produced by the Nigerian textile industry cannot support the fashion industry in terms of the quantity and quality. This vibrant industry should not be sacrificed on the altar of textile industry regeneration.”

Yusuf said the starting point was to strengthen the capacity of domestic industries, enhance their competitiveness, and reduce their import dependence as espoused in the Nigeria Industrial Revolution Plan (NIRP).

More importantly, he added, energy issue needed to be addressed as fast as possible.

He recalled that the textile industry had been a beneficiary of several fiscal incentives and protectionist measures over the years, yet it had remained in stagnation. “Some of them have even gone into receivership as they could not repay their loans. The lesson is that we should deal with the fundamental issues of production competitiveness in our economy. The textile industry needs to be saved from the excruciating burden of high operating and production cost. Meanwhile, and in the spirit of the executive order of the President, all uniforms of military and paramilitary institutions should be made from Nigeria produced textiles. This is a low hanging fruit that could be explored while the issue of high production cost is being addressed,” he recommended.

He said compelling the citizens to pay exorbitantly for systemic inefficiency was not an appropriate policy option, stating that such disposition would impose high welfare cost on the citizens, promote unethical practices in the economy, support the growth of underground economy, lead to loss of revenue to government and job losses.

“The key to sustainable industrialisation is to focus on competitiveness, anchored on resource-based industrialization,” Yusuf said, adding that robust incentives and concessions should be made available to industrialists.

“The move to create special economic zones in the six geopolitical zones in the country is a step in the right direction. The Bank of Industry has also done a great deal to provide funding for industries, textiles inclusive. But we need to deal with the fundamentals.”

 

Odinaka Anudu

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