Until recently, cotton played a significant role in the nation’s economy especially in the areas of employment and the growth of the Gross Domestic Product (GDP). There is no doubt that it also made some contributions to the nation’s political development bearing in mind that some of the political leaders, including in the ongoing dispensation, horned their skills and won their spurs in the textile and garment sector of the economy.
Somehow, as a result of policy shifts, Nigeria’s cotton, textile and garments sector took a plunge from which it was not able to recover until the interventions of the Central Bank of Nigerian (CBN) under Godwin Emefiele. As at the time the CBN intervened in 2018, domestic production of cotton had fallen to about 80,000 tonnes. From that date, he set a target for himself as he worked towards reviving the all- important sector. By 2020, domestic production of cotton on Emefiele’s watch has risen to an impressive record of 300,000 tonnes.
The real essence of the policy is aimed at addressing the huge spending in the importation of textile which had risen to a whopping N1.23 trillion. To end the drift that was sucking the nation dry, Emefiele started from the beginning by distributing high-yield cotton seeds to more than 100,000 farmers cultivating over 200,000 hectares of farmland. The bank also provided farm inputs such as fertilisers and pesticides, among others. The CBN plans to close the seed cotton gap in Nigeria of 450,000 metric tonnes this year, 2022.
A committee to ensure that farmers who benefit from the CBN intervention comply with the rules and guidelines that govern the scheme is already in place. It was also mandated to ensure Nigeria’s self-sufficiency in cotton production and textile materials within five years from 2019.
It is encouraging that CBN identified not only the need for the revival of the textiles and garments sector of the economy but also the bold steps needed to achieve that. It is painful to recall that Nigeria used to boast of 180 textile mill companies. These industries jointly provided employment to about 450,000 people, contributing about 25 per cent of the workforce in the entire manufacturing sector of the country.
Unfortunately, the sector lost steam due, essentially, to policy shifts and inconsistencies that encouraged the importation of textiles and finished clothes into the country, high cost of production occasioned mainly by high energy/power costs, and an insufficient quantity of cotton resulting from low- yielding cotton seeds.
It is gratifying to note that with CBN’s intervention, the cotton, textiles and garments sector has bounced back. The Bank has disbursed over N44 billion across the cotton, textile and garment (CTG) value chain between 2019 and 2020 and has been monitoring recovery over the period. Already, the sector has created over 620,000 direct and indirect jobs in two years while also ensuring that the textile industry records an increase in production – over 10 million meters of yarn materials.
It is estimated that the textile industry in Nigeria is capable of an average output of between 150,000 and 300,000 metric tonnes with a ginning capacity of 497,000mt at 51 per cent capacity utilisation, up from 19 per cent.
Computing the success on ground, it is obvious that the CBN has financed 19 ginneries, four textile companies and three garment manufacturers under the textile sector intervention facility within the same period. This has led to an increase in the number of active ginneries from 13 in 2019 to 21 as at June 2021.
Also, the CBN has financed over 200,000 cotton farmers between 2019 and 2020, cultivating 291,761 hectares of land with an output of 94,787 metric tonnes of cotton seed.
What this entails is that the number of farm hands must have increased within the period. With the availability of high -yielding seedlings, more high-quality cotton will be produced and enough raw materials made available to keep factories/mills productively busy. This, in turn, is creating space for more factory hands. It is also important to note that with these positive indices, high quality textiles and garments will be produced from the high-quality cottons which will in turn reduce if not eliminate the demand for imported alternatives.
Even more importantly, is the fact that the foreign exchange hitherto required for textile imports is now reserved. Experts project that should this policy be pursued consistently over time, Nigeria is certain to become a net exporter of cotton, textiles and garments especially as the expected new status and capacity of the sector attracts more investors who will expand production further.
It is pertinent to stress that this bold initiative by the CBN and the resources being deployed and applied to it must not be allowed to go down the drain. For this not to happen, comprehensive policies, rules and guidelines are already being applied to accord with international best practices.
This means that participating farmers and other relevant stakeholders who have contributions to make towards a successful outcome, are also being given needed practical training and empowerment. Implementation in this regard is carried out within the policy framework, guidance rules and regulations. Periodic reviews/evaluations are similarly undertaken. Corrective steps have already been designed and will be taken when and where necessary. Also, deterrent sanctions will be instituted ready to be applied on individuals and organisations who may dispose themselves to sabotaging, stalling or derailing this enterprise.
For emphasis, the cotton, textile and garment is a critical sector in the country with huge potential for creating hundreds of thousands of jobs, supporting the production and use of locally manufactured textiles and saving the nation billions in foreign exchange.
The CBN is also collaborating with some private stakeholders towards improving the quality of seeds to guarantee high yields just as it is also supporting the textile companies in the last two – three years, leading to the revival of some previously moribund companies.
Emefiele disclosed that with the collaboration of ginneries, a backward integration policy has been put in place that saw to the cultivation of an average of 53,100 hectares with an estimated output of 106,200 metric tons at two metric tons per hectare for the 2021 wet season. The bank is also working with existing prime anchors for 10,000 hectares of land with an estimated output of 20,000 metric tons.
President of the National Cotton Association of Nigeria, Anibe Achimugu, was elated by the intervention of the CBN which he said has contributed to the growth being recorded in the sector. “In spite of the Covid-19 challenges, we were able to identify 123,000 farmers while 90,700 hectares were cultivated.
Achimugu, referring to all the stakeholders in the sector said, “we must synergise, come together. We must create an ecosystem. We must help ourselves and not see ourselves as competitors. We need to work together. We all don’t want to lose this opportunity created for the sector by Emefiele and his team at the CBN.”
Some end users of cotton products asserted that the government patronage of the country’s cotton products is essential. Nigerian market alone is big enough for the operators in the garment industry. Their emphasis is to make Nigeria a garment manufacturing hub for big brands.
It will be recalled that the CBN has already set in motion an arrangement for the big garment users such as the military and paramilitary agencies to patronise the burgeoning cotton, textile and garment sector. According to Emefiele, this patronage is a policy game changer that is revolutionising the sector.
Daniels is an economic analyst based in Kaduna
