An economic and financial analyst, David Ibidapo, has thrown his weight behind the Central Bank of Nigeria (CBN) decision to ban further allocation of scarce foreign exchange on importation of textiles and garments into the country.

Mr Ibidapo told the News Agency of Nigeria (NAN) on Sunday in Abuja that the amount of foreign exchange spent on funding the importation of textiles and garments was more than half of the amount need to finance the nation’s budget deficit.

He commendable the CBN for its policy to add all forms of textile materials on the list of items restricted from accessing foreign exchange from the CBN at official exchange rate.

CBN Governor, Godwin Emefiele, on Tuesday said Nigeria currently spends above $4 billion annually on imported textiles and ready-made clothing.

Also, Mr Ibidapo said the restriction would reduce pressure on FOREX and inspire local production of textiles for both local and international consumption.

“This is a good initiative by the CBN, because if you look at what we spend on importation it is about 50 per cent of our budget deficit. And imagine if that amount is being generated internally, it will automatically impact on our Gross Domestic Product (GDP).

“This will also inspire local production of textiles with the single digit rate the CBN is promising local textile industries that are interested in getting loans.

“It will also lessen pressure on FOREX as demand for it to import these textiles into the country pressures down the value of the naira against the dollar,” said the expert.

According to him, it is high time the nation controlled the levels of goods imported, saying too much dependence on importation wakilling local industries due to unhealthy competition with foreign goods.

Mr Ibidapo said considering Nigeria’s rising population, it will serve as a very good investment hub for foreign investors and companies because of the very ready market it had waiting to buy these goods.

However, he said once the country begins to ban some items the country has the capacity to produce, then this same rising population will purchase what we are producing locally and the sectors will begin to contribute significantly to the GDP.

The economist said the only way Nigeria can alleviate poverty was to grow the economy at an average of 10 per cent every year, from the two percent the country is currently struggling with.

He said the country needs to continue in the direction the CBN has toed, in addition to giving loans to the textile industry value chain at a single digit interest rate.

Mr Ibidapo said in the long run it would boost the country’s GDP and create employment.

When these factories begin to boom, he said there would be more employment, which would translate into income that would be circulated in the economy to achieve the needed growth.

He, however, said achieving growth through such initiatives was solely dependent on the government willingness to be committed to the policy to clampdown on smugglers.

“I think we can achieve the desired result only if the government can really reduce the activities of smugglers and make the process of getting loans for the textile industry not too complex.

“Professionalism and specialization will also improve, the government should be committed to the policies and in making it work; it is very achievable.

“If they can replicate this in other sectors and try to boost production of the items we import in our country, we will produce for the country and also export as demand for these products will increase and with that the value for our currency will begin to appreciate,” Mr Ibidapo explained.

In 2015, the CBN restricted the availability of foreign exchange to the importation of 41 items which could be competitively produced within the economy and the list has increased overtime.

Since then, the CBN has raised the number of items affected on the list to 43, with the inclusion of fertilizer and textile products.

(NAN)

Source:
https://www.premiumtimesng.com/business/319251-economist-supports-cbn-ban-on-textile-products-says-forex-on-imports-enough-to-fund-budget-deficit.html

This so called economist must have been solely educated I'm Nigeria because most of them just have some head knowledge. They are the equivalent of the computer science graduates from the nation's public universities with little knowledge about computing. Just theory and book work

How can an economist say that the country is spending half of the budget deficit on imported textiles? What correlation does that have? The government isn't the one spending the money on importing the textiles. Textile importers simply source the forex from the CBN and they pay for it! They didn't dash them this money or lent it to them.

If I sell you $500,000 at 360 to a $1 and you pay me 180m and you use the $500,000 to import textiles and the ship carrying it capsizes and you lose all stock, that one no concern me. I don collect my 180m

This ban from the CBN will simply put massive pressure on the black market and there'll be a massive gap between it and the investor window down for forex.

A government trying to fight corruption should do it's utmost for all business to be done above ground and not below it where corruption is bound to thrive.

Also,there's nothing wrong in importing textiles. How will the textile factories be competitive when there's inadequate power and high lending rates. This is doomed to fail from the word go. The Bank of Industry lent them 200b in the past which I'm sure a good chunk we t down the drain

It's time government focused on an export or perish mentality because that's the proper way to industrialise and not through import substitution which forces you to pour resources on areas lack comparative advantage.

What kind of third world country is this that does not have a textile sector that is a massive exporter of textiles and garments? If the nation has failed in that, it shows there are deep-rooted problems why the textile industry is dormant here.

grandstar:
This so called economist must have been solely educated I'm Nigeria because most of them just have some head knowledge. They are the equivalent of the computer science graduates from the nation's public universities with little knowledge about computing. Just theory and book work

How can an economist say that the country is spending half of the budget deficit on imported textiles? What correlation does that have? The government isn't the one spending the money on importing the textiles. Textile importers simply source the forex from the CBN and they pay for it! They didn't dash them this money or lent it to them.

If I sell you $500,000 at 360 to a $1 and you pay me 180m and you use the $500,000 to import textiles and the ship carrying it capsizes and you lose all stock, that one no concern me. I don collect my 180m

This ban from the CBN will simply put massive pressure on the black market and there'll be a massive gap between it and the investor window down for forex.

A government trying to fight corruption should do it's utmost for all business to be done above ground and not below it where corruption is bound to thrive.

Also,there's nothing wrong in importing textiles. How will the textile factories be competitive when there's inadequate power and high lending rates. This is doomed to fail from the word go. The Bank of Industry lent them 200b in the past which I'm sure a good chunk we t down the drain

It's time government focused on an export or perish mentality because that's the proper way to industrialise and not through import substitution which forces you to pour resources on areas lack comparative advantage.

What kind of third world country is this that does not have a textile sector that is a massive exporter of textiles and garments? If the nation has failed in that, it shows there are deep-rooted problems why the textile industry is dormant here.

Again , just like the same nonsense with rice.


Nigeria is very very anti trade.

Nigeria is not anti trade, Nigeria is anti dumping.
Let them come and set up their factories here or wear the textiles themselves.
So many block heads roaming Nairaland these days, if all we do is open the country to all kinds of imports, how do we stimulate local production that will create the much needed jobs?.

Nigeria is a joke of a country, where you dashing them the foreign currency before,if you people know howfar igbos have gone in business,CBN will hire a trader at Onitsha or aba to come n manage CBN because it seems CBN is more confused than buhari.there are 1001 ways to source for foreign exchange.

We have too many educated fools in Nigeria and that is why the economy of the country is not growing and someone is up there shouting that Nigeria is anti dumping,america should have banned apple and other big electronic companies to stop producing there goods in China and it seems buhari wants to cripple the economy of this nation before dying.

The same was done on rice,cement and even sugar but no impact was felt.

Of the original 41 banned items, how many have Nigerians started producing locally?

Governments everywhere are the worst allocators of resources. Once they start choosing to give special interest rates to industries, corruption will certainly follow. In fact, only countries like China where people are killed for corruption can such policies as these work.

Grandstar, a focus on exports will also not work the same way you now realise import substitution does not work.

Any form of government intervention to spur a specific sector hardly ever works because people are inherently corrupt.

When the US Economy was collapsing in 2008, the federal reserve reduced interest rates to close to zero percent to help spur lending but the banks still refused to lend money out. They simply used the money to speculate in the markets and to buy back their stocks. This created an illusion of a recovery in the US economy however, common Americans did not benefit in anyway so inequality grew, and social unrest is currently at the highest levels in decades.

In the Eurozone, the biggest cost to Britain is payments to subsidize farmers in other European countries. Apart from issues with immigration, this is the biggest reason for Brexit.

A government's role in an economy should not go beyond providing Education, healthcare, security and Law and order. In order to achieve these things, infrastructure such as electricity, roads, transportation systems, communication technology, public water works, etc will have to be developed. In most climes, their central banks only have one purpose which is to fight inflation.

How much did our government invest in our musicians and our film industry, yet today both are robust and are contributing to our GDP and also creating lots of employment.

Our fight should be for a reduced civil service and an increase in spending on public goods such as education as earlier stated.

Una never see something

This coming 4years of NEXT LEVEL will be full of ban upon ban tins

More bans loading.....

So finally okezie Ikpeazu of abia , finally won the election? Nawa ooo

lastempero:
Nigeria is a joke of a country, where you dashing them the foreign currency before,if you people know howfar igbos have gone in business,CBN will hire a trader at Onitsha or aba to come n manage CBN because it seems CBN is more confused than buhari.there are 1001 ways to source for foreign exchange.

Hahaha haha Aba trader to run CBN?? Lwkmd. Chai nothing person no go hear for nairaland. Clearly you know absolutely nothing about the issue being discussed. So I wonder why you didn't just read the topic and moved on

grandstar:
This so called economist must have been solely educated I'm Nigeria because most of them just have some head knowledge. They are the equivalent of the computer science graduates from the nation's public universities with little knowledge about computing. Just theory and book work

How can an economist say that the country is spending half of the budget deficit on imported textiles? What correlation does that have? The government isn't the one spending the money on importing the textiles. Textile importers simply source the forex from the CBN and they pay for it! They didn't dash them this money or lent it to them.

If I sell you $500,000 at 360 to a $1 and you pay me 180m and you use the $500,000 to import textiles and the ship carrying it capsizes and you lose all stock, that one no concern me. I don collect my 180m

This ban from the CBN will simply put massive pressure on the black market and there'll be a massive gap between it and the investor window down for forex.

A government trying to fight corruption should do it's utmost for all business to be done above ground and not below it where corruption is bound to thrive.

Also,there's nothing wrong in importing textiles. How will the textile factories be competitive when there's inadequate power and high lending rates. This is doomed to fail from the word go. The Bank of Industry lent them 200b in the past which I'm sure a good chunk we t down the drain

It's time government focused on an export or perish mentality because that's the proper way to industrialise and not through import substitution which forces you to pour resources on areas lack comparative advantage.

What kind of third world country is this that does not have a textile sector that is a massive exporter of textiles and garments? If the nation has failed in that, it shows there are deep-rooted problems why the textile industry is dormant here.

I like your export or perish model. We can't export when there is clear incentive to import same items. I think it is high time the textile industry rise to the occasion and deliver us from this import madness of nameless brands of shirts and other wears that currently litter our markets. They should be on the offensive since loans are available at concessionary single digit rates for those aspiring to scale their productions. I think the CBN also needs to do more awareness on the available incentives to the tailoring and garment industry in order to intimate them of the available incentives.
God bless Nigeria.

emmabest2000:
Una never see something

This coming 4years of NEXT LEVEL will be full of ban upon ban tins

More bans loading.....

Let's ban to encourage the people in Aba if that is what it will take to improve our economy. I heard Agricultural sector contributed 30% to 2018 GDP. I think other sectors can do better. We only need the will power to do the needful.

Next level don start oo

grandstar:

How can an economist say that the country is spending half of the budget deficit on imported textiles? What correlation does that have? The government isn't the one spending the money on importing the textiles. Textile importers simply source the forex from the CBN and they pay for it! They didn't dash them this money or lent it to them.

This is why it is good to stay in GNS 101 classes

Compare the two bold statements and you will understand the point of that economist

“This is a good initiative by the CBN, because if you look at what we spend on importation it is about 50 per cent of our budget deficit. And imagine if that amount is being generated internally, it will automatically impact on our Gross Domestic Product (GDP).

I know you might still not understand, so let me help you.

In the larger context, that man was referring to the whole “country” literarily(meaning the general populace or the textile importers) as against your own interpretation of referring to the “country” as the federal government.

According to him, it is high time the nation controlled the levels of goods imported, saying too much dependence on importation was killing local industries due to unhealthy competition with foreign goods.

Exactly. No Nigerian bank will give you loan when they know you have foeriegn competetors that can put you out of business.

This is another good develpopment to boost our textile industry.


Every government policy must have casualties but as long as its for the long term good of the country’s economy then it is welcome.

lastempero:
The same was done on rice,cement and even sugar but no impact was felt.

Prepare yourself for another Dangote powered Monopoly.

I wish they can ban foreign medical treatments for all government officials. We are spending too much forex on these idiots running abroad each time they have headache. That will also enable us to use the huge sum of money to build our own, well equipped hospitals.

grandstar:
This so called economist must have been solely educated I'm Nigeria because most of them just have some head knowledge. They are the equivalent of the computer science graduates from the nation's public universities with little knowledge about computing. Just theory and book work

How can an economist say that the country is spending half of the budget deficit on imported textiles? What correlation does that have? The government isn't the one spending the money on importing the textiles. Textile importers simply source the forex from the CBN and they pay for it! They didn't dash them this money or lent it to them.

If I sell you $500,000 at 360 to a $1 and you pay me 180m and you use the $500,000 to import textiles and the ship carrying it capsizes and you lose all stock, that one no concern me. I don collect my 180m

This ban from the CBN will simply put massive pressure on the black market and there'll be a massive gap between it and the investor window down for forex.

A government trying to fight corruption should do it's utmost for all business to be done above ground and not below it where corruption is bound to thrive.

Also,there's nothing wrong in importing textiles. How will the textile factories be competitive when there's inadequate power and high lending rates. This is doomed to fail from the word go. The Bank of Industry lent them 200b in the past which I'm sure a good chunk we t down the drain

It's time government focused on an export or perish mentality because that's the proper way to industrialise and not through import substitution which forces you to pour resources on areas lack comparative advantage.

What kind of third world country is this that does not have a textile sector that is a massive exporter of textiles and garments? If the nation has failed in that, it shows there are deep-rooted problems why the textile industry is dormant here.

Good analysis

Tianamen1:
Of the original 41 banned items, how many have Nigerians started producing locally?

Governments everywhere are the worst allocators of resources. Once they start choosing to give special interest rates to industries, corruption will certainly follow. In fact, only countries like China where people are killed for corruption can such policies as these work.

Grandstar, a focus on exports will also not work the same way you now realise import substitution does not work.

Any form of government intervention to spur a specific sector hardly ever works because people are inherently corrupt.

When the US Economy was collapsing in 2008, the federal reserve reduced interest rates to close to zero percent to help spur lending but the banks still refused to lend money out. They simply used the money to speculate in the markets and to buy back their stocks. This created an illusion of a recovery in the US economy however, common Americans did not benefit in anyway so inequality grew, and social unrest is currently at the highest levels in decades.

In the Eurozone, the biggest cost to Britain is payments to subsidize farmers in other European countries. Apart from issues with immigration, this is the biggest reason for Brexit.

A government's role in an economy should not go beyond providing Education, healthcare, security and Law and order. In order to achieve these things, infrastructure such as electricity, roads, transportation systems, communication technology, public water works, etc will have to be developed. In most climes, their central banks only have one purpose which is to fight inflation.

How much did our government invest in our musicians and our film industry, yet today both are robust and are contributing to our GDP and also creating lots of employment.

Our fight should be for a reduced civil service and an increase in spending on public goods such as education as earlier stated.

-You must have acquired knowledge from a decent institution. I bet anyone here, you’re more clever than all in Buhari’s family lineage. Well done for the above post. Saves me some typing...

I AM YET TO SEE THEM PLACE A BAN ON FOREX WAIVERS FOR RELIGIOUS TOURISM.


NIGERIA HAS ALWAYS BEEN RULED BY BUNCH OF ILLITERATES.

Another good step will be to de-formalise' our dress mode...e.g what is wrong with using ankara to sow long sleeve shirts and wearing it to work on a Monday morning....our reliance on tm lewin shirts will reduce...

And this uncle economist, his wife and kids might not be putting on ankara or kampala oooo, mtschewww

Tianamen1:
Of the original 41 banned items, how many have Nigerians started producing locally?

Governments everywhere are the worst allocators of resources. Once they start choosing to give special interest rates to industries, corruption will certainly follow. In fact, only countries like China where people are killed for corruption can such policies as these work.

Grandstar, a focus on exports will also not work the same way you now realise import substitution does not work.

Any form of government intervention to spur a specific sector hardly ever works because people are inherently corrupt.

When the US Economy was collapsing in 2008, the federal reserve reduced interest rates to close to zero percent to help spur lending but the banks still refused to lend money out. They simply used the money to speculate in the markets and to buy back their stocks. This created an illusion of a recovery in the US economy however, common Americans did not benefit in anyway so inequality grew, and social unrest is currently at the highest levels in decades.

In the Eurozone, the biggest cost to Britain is payments to subsidize farmers in other European countries. Apart from issues with immigration, this is the biggest reason for Brexit.

A government's role in an economy should not go beyond providing Education, healthcare, security and Law and order. In order to achieve these things, infrastructure such as electricity, roads, transportation systems, communication technology, public water works, etc will have to be developed. In most climes, their central banks only have one purpose which is to fight inflation.

How much did our government invest in our musicians and our film industry, yet today both are robust and are contributing to our GDP and also creating lots of employment.

Our fight should be for a reduced civil service and an increase in spending on public goods such as education as earlier stated.

Lol

Your analysis didn’t give any solution that can be considered better than that of the federal government. You’re just using your knowledge of the economy of foreign countries to bamboozle the obvious majority of economic illiterates on this site.

Remind me again the difference between what the federal government has done and what trump is doing with China presently?


At the bold paragraph. I don’t know how old you were between 2001-2007 but I remember the federal government did the same thing in our entertainment industry.

What did they do?

Ban all radio and TV stations from playing Foreign musics and films.

The result is what we see today.

Same thing was done on football but as we all know, the ROI on football is quite low especially in a country like nigeria where we only have the talents but lack the expertise to nurture talents.


Same thing was done partially in the auto industry by GEJ but failed because there was no steel industry to service the auto makers.

These set of idi'ots should revamp power sector before placing a ban on anything.
No palliative measures yet you ban. FG is high on oshogbo weed.

Who will invest in Nigeria textile industry where we're yet to produce 10,000megawatt of electricity.

eluquenson:
These set of idi'ots should revamp power sector before placing a ban on anything.
No palliative measures yet you ban. FG is high on oshogbo weed

Who will invest in Nigeria textile industry where we're yet to produce 10,000megawatt of electricity.

Why do we have to wait for power sector to stabilize before we start producing? When we can reduce the money we spend on importation and use the same money to develop the power sector.

Dangote has been in business for over 30years with the same poor electricity.

Investors don’t care about your power sector. They can generate their own power. What they care about is the available market without unfair competition from imported goods and enabling environment with ease of doing business.

7lives:
Nigeria is not anti trade, Nigeria is anti dumping.
Let them come and set up their factories here or wear the textiles themselves.
So many block heads roaming Nairaland these days, if all we do is open the country to all kinds of imports, how do we stimulate local production that will create the much needed jobs?.

My bro.. To some extent yes you r right but there is no where in the world where u stimulate local production by banning forex trade, closing the borders which will only trigger price increase and fuel smuggling. Google and see. The biggest importers of goods and even staple food are the biggest economies in the world.. Importation is a must if u don't want people to starve to death..

And yes, Nigeria is blessed, so blessed that we don't need to produce anything and yet we have more than enough to export for the next 200years. Minerals and resources. Forget about oil. Google the mineral deposits in Nigeria. No state is poor. Do u know that even sand is an export? What do Arab nations produce yet they only export one thing... We lack knowledge and our leaders can't see beyond there nose. God help us

dan2976:


My bro.. To some extent yes you r right but there is no where in the world where u stimulate local production by banning forex trade, closing the borders which will only trigger price increase and fuel smuggling. Google and see. The biggest importers of goods and even staple food are the biggest economies in the world.. Importation is a must if u don't want people to starve to death..

And yes, Nigeria is blessed, so blessed that we don't need to produce anything and yet we have more than enough to export for the next 200years. Minerals and resources. Forget about oil. Google the mineral deposits in Nigeria. No state is poor. Do u know that even sand is an export? What do Arab nations produce yet they only export one thing... We lack knowledge and our leaders can't see beyond there nose. God help us

Yes in the short and medium term there will be inflation but eventually everything will normalize.

The short and medium term depends on the government funding of the sector through loans.

you want to encourage local textile production where there is no electricity?

why not ban medical tourism for public office holders,abi nah naira they spend abroad?
ndi ara

grandstar:
This so called economist must have been solely educated I'm Nigeria because most of them just have some head knowledge. They are the equivalent of the computer science graduates from the nation's public universities with little knowledge about computing. Just theory and book work

How can an economist say that the country is spending half of the budget deficit on imported textiles? What correlation does that have? The government isn't the one spending the money on importing the textiles. Textile importers simply source the forex from the CBN and they pay for it! They didn't dash them this money or lent it to them.

If I sell you $500,000 at 360 to a $1 and you pay me 180m and you use the $500,000 to import textiles and the ship carrying it capsizes and you lose all stock, that one no concern me. I don collect my 180m

This ban from the CBN will simply put massive pressure on the black market and there'll be a massive gap between it and the investor window down for forex.

A government trying to fight corruption should do it's utmost for all business to be done above ground and not below it where corruption is bound to thrive.

Also,there's nothing wrong in importing textiles. How will the textile factories be competitive when there's inadequate power and high lending rates. This is doomed to fail from the word go. The Bank of Industry lent them 200b in the past which I'm sure a good chunk we t down the drain

It's time government focused on an export or perish mentality because that's the proper way to industrialise and not through import substitution which forces you to pour resources on areas lack comparative advantage.

What kind of third world country is this that does not have a textile sector that is a massive exporter of textiles and garments? If the nation has failed in that, it shows there are deep-rooted problems why the textile industry is dormant here.

Nice analysis but I thought the effect of exclusion of some items is not a ban from importation but exclusion from OFFICIAL exchange market. You can source for forex at other rates (parallel market) and import those items without any hindrance. This reduces pressure on demand for forex at official rate apart from the removal of the ‘subsidy’ of the difference between the two rates.

I am confused about this new restriction on textiles though. In the previous 41 items restricted from official forex, Textiles, Woven fabrics and Clothes were numbers 35, 36 and 37 on the previous list. What are they restricting again?

jomoh:


Why do we have to wait for power sector to stabilize before we start producing? When we can reduce the money we spend on importation and use the same money to develop the power sector.

Dangote has been in business for over 30years with the same poor electricity.

Investors don’t care about your power sector. They can generate their own power. What they care about is the available market without unfair competition from imported goods and enabling environment with ease of doing business.

So, you want to tell me our government are very sincere. SMH