The Central Bank of Nigeria, CBN has pledged to bail out the ailing textile and garment industry by granting credit facility as well as fight against smuggling of its products with the collaboration with other government agencies.
The Governor of CBN, Godwin Emefiele gave assurance of the apex bank’s commitment to reviving the industry during the meeting with Cotton, Textile and Garment industry, CTG in Lagos.
According to him “The Federal Government under the leadership of President Muhammadu Buhari has stated its readiness to revive the ailing industry in order to create employment and the CBN is also willing to bail out the operators, not only in credit facility but also in other areas like tackling smuggling, creating enabling environment etc.
“We are going to provide cheap long term fund with single digit lending rate and continue our complimentary efforts to addressing other key infrastructure,” Emefiele said.
He said that “Finance is not the major obstacles to this sector but smuggling. There are many other challenges but with our collective collaboration this meeting will immediately resolve these issues”
He lamented the demise of many industries in view of the fact that the sub sector that once employed over one million hard working Nigerians is now almost dominated by imports from Asia.
According to him, “Between 1970 and 1980s, textile industries were spread across the country, with many mills located in Kaduna, Lagos, Funtua, Gusau, Asaba, Aba, Kano and host of other cities.
“There were well over 150 vibrant textile mills operating at close to full production capacities and this sector accounted for well over a million direct and indirect jobs, second only to the government as an employer of labour but now the story is different.”
He frowned at the abandoned and dilapidated structures of these textile companies spread across the country, saying “CTG companies began to feel the pinch of the rather unstable political environment, policy somersaults, massive and unfettered smuggling of substandard Asian products into the country, high production costs due to obsolete machineries, low level technologies and poor state of the country’s infrastructure, especially power.”
He noted that the sector with over 150 vibrant mills can only boost of less than 20 textile companies, which he said was sad as the sectyor now employs less than 50,000 persons.
According to him, Banks who were many years ago were falling over themselves to lend to the sector were suddenly left with huge non performing loans after the bubble burst.
“Many banks were stuck with specialised and obsolete equipment that coud not be easily disposed of. This period heralded the beginning of the thorny relationship between banks and textiles companies.”
He further disclosed that one of the measures taken by the CBN to combat smuggling was restriction of Foreign Exchange, FX to importers.
“Since the CBN has no mandate to out rightly ban the importation of any product into the country, the bank recently included textiles as one of the 41 items excluded from the FX sales from the Nigerian FX market.
“Given the challenges, the CBN is currently playing catalytic role in the power sector as the bank launched the N213 billion Nigeria Electricity Market Stabilisation Facility, NEMSF designed to help resolve liquidity challenges in the electricity sector and settle debt owed to gas supplies in the power sector.”’
Responding on behalf of the stakeholders, Leader of the Textiles Mills Association of Nigeria, Grace Adereti commended the CBN Governor for the concern and interest shown in the sector.
According to her “We must thank you as you are the first Governor of CBN to call the various stakeholders for a meeting of this nature and we believe the apex bank will bail us out as it did to some other sectors since we are the largest employer of labour after government in the past.
“It is a sad moment that the industry has dropped from being the second largest employer of labour to the least. Smuggling and harsh operating environment has been the bane of this sector and we believe that the sector would come back to life with your assistance.”
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