By Ummi Kabir
The cotton value chain in Nigeria once created employment opportunities for well over 450,000 people and supported 180 textile mills. A combination of sustained stream of policy somersaults if not failures blighted the glorious days of the 1970 and early 1980s with a devastating impact on the sector especially its capability to contribute to Gross Domestic Product (GDP).
Curiously, a once thriving local cotton and textile industry succumbed to the negative effect of the influx of cheap and heavily subsidised brands as the country became a dumping ground for textile materials of doubtful quality especially from Asia. Cotton farmers, ginneries and textile factories with time fizzled out as a result of their inability to withstand the pressure from foreign competition made worse by the preference of Nigerians who had cultivated a taste for not just foreign textile products but also virtually every item including biscuits and apples. The fad was reinforced by the readily available petro-dollar.
Cotton stands out as the most important fibre material for Nigeria’s textile industry. The production of the cash crop in Nigeria, however, suffered a lull plunging the industry into near extinction. Many of the textile factories have stopped operation altogether resulting in retrenchment of staff and the swelling of the unemployment market. However, a paltry 25 textile factories are hanging in there and operating at below 20 percent of their installed capacities. The cotton growing sector was not faring any better.
Somehow, the governments of that era did not take full cognizance of the damage being done on the economy as a whole. Or maybe they did not know how to apply the measures urgently needed to reverse the disturbing trend. That was the situation until four years ago when Mr Godwin Emefiele took over as the helmsman at the Central Bank of Nigeria (CBN).
It took an extraordinary courage of a man determined to confront the monster that was depleting the nation’s external reserves and more so those benefitting from the mind-boggling exercise that was bleeding the country to death. Stopping the ugly trend became part of his policy directed at making Nigeria a net producer of cotton again and restoring her position as a big player in the cotton value chain.
At a Cotton, Textile and Garment stakeholders meeting recently tagged: Cotton Harvest 2020 Season, the CBN disclosed that in those four years, it has invested in excess of N120 billion in the cotton sector. It takes such a huge investment to revive a once vibrant sector which had been made to lie prostrate on its belly. This commendable intervention is part of the apex bank’s commitment to eradicating smuggling and dumping of textile goods in the country and also resuscitate and return the lost glory of the sector. Similarly, it is a concerted effort to reactivate its employment potentials, make it contribute to the country’s revenue drive and, even more importantly, plug the loopholes exploited by unpatriotic Nigerians to drain the nation’s foreign reserve.
Emefiele’s policy thrust was and still is to revamp the sector by supporting farmers to cultivate quality cotton lint being the major raw material for the industry. However, in my opinion, a lot has been achieved in the sector since the policy was rolled out over the last few years. But even as the apex bank itself acknowledged, much still needed to be done to restore the sector to its pristine days.
As the effort persist, I consider it pertinent to point out that between 2018 when the journey of resuscitation commenced to this year, 2020, the cotton sector which forms part of the Anchor Borrowers Programme (ABP), has been able to engage well over 340,000 farmers who were also able to earn for themselves a whopping N31.6 billion.
Another observable positive impact of the policy is that 12 ginneries were funded under CTG intervention within the period under review which put them in a position to create 450,000 jobs. Furthermore, because funding was readily available, the capacity of the ginneries increased exponentially making it possible for cotton lint produced to outweigh the annual requirement of the textile companies not minding the outbreak of COVID-19 and its negative effects on socio-economic life of the country.
Recall that the CBN had added textile on the list of items to be denied official foreign exchange support. So, it is not a surprise, in our view, that cotton importation was at zero per cent in 2019. As a follow up to that, cotton seeds’ farming is thriving as ginneries are supplying textile companies with enough raw materials to keep them in business.
The Emefiele policy has significantly achieved its aim as smuggling of textile has reduced, job creation in the sector is rising steadily and the exploitation of the value chain in the sector is being harnessed satisfactorily since the intervention. Also, the country is no longer wasting as much scarce foreign exchange on the importation of cotton and its derivatives.
Considering the ingenuity and the diehard propensity of the average Nigerian smuggler, and in spite of the risks involved as well as the challenge of sourcing foreign exchange in the black matter, the business is still on. What this means is that other agencies of government like the Customs Service has more to do to assist the CBN in its determined effort to salvage the CTG sector.
The President of National Cotton Association of Nigeria (NACOTAN), Mr Anibe Achimugu, in an assessment of the collaboration between the Central Bank of Nigeria and his association to revive the cotton sector said, “We are collaborating 150 per cent with the CBN. It is their programme and we are very happy to be part of it. Emefiele’s policy in the sector is a breath of fresh air.”
He observed that before the CBN intervention through the Anchor Borrowers Programme (ABP), farmers were recording very low yield per hectare as low as 40-60 metric tons per year or 400-500 kilograms per hectare.
He said that the beauty of the collaboration with CBN is that the policy is based on input financing. No cash component. He brought in input suppliers such as mechanization agents, fertilizer merchants and of course improved seedlings were made available to farmers. Each got a minimum of 40 kilograms which were more than enough for the planting season to the point that early farmers who lost their farms to bad weather had excess to replenish their farms.
With all these, there was improved yield per hectare, ginneries, the textile and garment sector were empowered through a guaranteed price that will enable them to pay back their loans and earn a reasonable profit margin. “It has been a win-win situation. CBN recognized a major challenge in the quantity and quality of seedlings and addressed it effectively and efficiently.”
The NACOTAN president said that the CBN approach is holistic as every single sub-sector in the cotton value chain has been considered and carried along just as he added that the CBN has an open door policy whereby any challenge is identified and addressed with the sole intention of ensuring the success of the policy which is restoring the sector to its pristine levels.
“The CBN Governor is flexible and proactive in his approach. He speaks to us, explains to us and encourages us in our tasks.”
Kabir wrote from Ejule in Kogi State