The fears in the local textile and furniture industries over the delisting of textile and furniture from the Import Prohibition List are expected even if we must quickly add that the decision is inevitable, in view of the circumstances under which it was done. The idea for removal of the two items from the list was mooted in the twilight of former President Goodluck Jonathan’s administration, effective April 11, 2015. Expectedly, the recent resolve of the Nigeria Customs Service to implement the directive, as confirmed by Abdullahi Dikko, Comptroller-General of Customs, is heightening anxiety in the local textile and furniture sectors.
The delisting was done under the Import Adjustment Tax (IAT) of the new Economic Community of West African States – Common External Tariff (ECOWAS-CET) regime involving about 15 countries in the ECOWAS sub-region. The CET policy that is subject to review every five years will enable Nigeria Customs Service ensure that by 2020, none of the currently banned items would be on its Import Prohibition List.
The silence of the current administration has amplified fretfulness among the local manufacturers of these products, especially against the background of the recent directive from the Central Bank of Nigeria (CBN) to deny access to foreign exchange by some sectors, including furniture and textiles.
We are not oblivious of the negative implications of this directive, more so on the sustainability of the capacity utilisation of local industrial plants that currently stands, sadly, at a vastly discouraging 30 per cent in an economy that yearns for employment generation to accommodate the millions of unemployed graduates in the land. We doubt whether there was deep thinking before the Federal Government came up with its N50 billion intervention fund for the textile sector. The repayment terms of the facility will definitely be imperilled by this latest delisting since that sector and the furniture industry will now be exposed to influx of cheap imported commodities.
Already, the textile market is saturated with over 85 percent imported printed fabrics most of which are sub-standard fabrics from Asian and neighbouring African countries. Unfortunately, apart from the government’s intervention fund, the Bank of Industry’s (BoI) ongoing 44 financed projects under its Cotton, Textile and Garment (CTG) intervention fund with a loan profile of N46.89 billion, and five projects under wood and leather sector intervention fund that had gulped N1.93 billion are under imminent threat. Will all these huge credit facilities be wasted because of policy approbation and reprobation by the government?
The way things stand, and in view of the globalisation treaty to which Nigeria is a party, it might be difficult for her to arbitrarily repudiate the treaties/protocols because of likely sanctions, no matter how inconsequential. We will therefore not encourage any infraction of treaties voluntarily signed by the country. At the same time, the self-first instinct, despite the globalisation policy, dictates that the nation should not imperil her economy. This is why the government should forthwith throw up incentives that will mainly cater to the interests of local industries to avail them the opportunity of competing favourably with their foreign counterparts. Power supply, among others, is important here.
The Nigeria Customs Service should realise the need to be strict and effective in applying the correct levies and duties on these unbanned items to earn desired revenue for the government that is in dire need of money. This will stem the influx of just any textile or furniture items into the country. Our stand is that this or any other policies of government should not be allowed to endanger our furniture and textile industries.
