Following two years of operation of the N100bn intervention fund, the Textiles, Cotton and Garment subsector appears to be regaining breath, LAYI ADELOYE reports
Stakeholders in the Nigerian Cotton, Textile and Garment subsector have assessed th performance of the N100bn intervention fund given to the industry two years ago, submitting that it has revived operations.
They, however, called on the Federal Government to make available to the sector an intervention fund of about N1n, in view of the current economic reality that has made the initial N100bn seed fund inadequate.
Similarly, they called for a longer tenor rate on the repayment of the loans in order to aid the growth and development of the sector.
The operators also commended the Bank of Industry for its painstaking approach to the fund’s management, mobilisation and disbursement, which, according to them, resulted in the revival of the once comatose subsector.
Meanwhile, the bank has said that about 60 per cent of the N100bn initial intervention fund offered by the government had been disbursed to the sector in the last two years.
All these came out at a validation workshop organised by the Bank of Industry, in collaboration with the United Nations Industrial Development Organisation, in Abuja, on Tuesday.
In 2010, the Federal Government introduced a N100bn Cotton Textile and Garment Revival Scheme, managed by the Bank of Industry to reverse this ugly trend of progressive industry collapse and ensure a rapid resuscitation and upgrading of the entire CTG value-chain.
Two years down the line, the subsector’ stakeholders appraised the funds’ performance, saying substantial portion of the fund had been successfully disbursed to beneficiaries, with the impact emerging “very encouraging.”
Recent figures from the Manufacturer’s Association of Nigeria revealed that the capacity utilisation in this subsector has increased tremendously, from 29.14 per cent in 2010 to 49.70 per cent in 2011. In addition, a number of hitherto moribund textile mills have been reopened, with about 8,070 jobs saved, just as over 5,000 new jobs have been created.
The Minister of Trade and Investment, Mr. Olusegun Aganga, recalled the developments in the subsector, stressing that the subsector had gone through ups and downs since 1960 but had just started getting some reprieve through the intervention funds.
He said, “Nigeria’s Cotton, Textile and Garment Industry was a leading sector in the economy from the 1960s through to the 1970s, and in the early 1980s, when the industry had about 175 textile mills and employed over 600,000 workers making it the second largest employer of labour, after the government.
“Unfortunately, however, by 2008, the Textile factories still in operation had reduced to 24 textile mills and 10 ginneries employing less than 25,000 people, and with exports less than $50m.
According to him, among the factors that led to the decline in the sector include but not limited to massive influx of textiles and apparels from Asia particularly after the Multi Fibre Agreement expired in 2005; inadequate and epileptic energy supply and heavy reliance on self-generation of power, leading to high and uncompetitive production costs; global economic challenges; massive smuggling of cheaper textiles of lower quality; changing consumer tastes and habits; and huge debt burden on producers in the value chain amongst others.
He said the subsector held strong potential due to its natural cotton endowments, large market size and legacy sector knowledge.
He explained, “Nigeria’s population of over 167 million people represents a natural market for basic textiles and apparel related goods. Potential to export to regional and select developed markets (such as the United States, under the African Growth and Opportunities Agreement tariff regime) are also very attractive.
“The existing textile infrastructure and skill base provides the industry with a pool of knowledgeable workforce particularly in Northern Nigeria. The above make this sector too important for government to ignore.
Aganga said the evaluation of the socio-economic impact of the Fund to the beneficiaries and the national economy at large could, therefore, not have come at a better time.
“Although, it is evident that the CTG Revival Fund Scheme has provided the industry players with a unique source of incentive-based long-term fund for the financing and refinancing of capital investments and revolving working capital, based on my interactions with some of you and my findings during my visits to your factories, I am not unaware of other challenges being faced by you.”
The Chief Executive Officer of BoI, Ms Evelyn Oputu, said there was the need for a line of credit to be opened for the resuscitation of companies in the textile industry, in view of the fact that it remained a key sector generating a high number of jobs in the country.
She noted that the bank and other agencies were doing a mid-term evaluation of the Cotton, Textile and Garment Scheme in a bid to examine the progress made and other areas of concern.
According to her, BoI has disbursed nearly 60 per cent of the N100bn allotted to the textile sector to revive it, but hopes to increase funding to the sector, if empowered.
The Country Representative, UNIDO, Patrick Kormawa, advocated the need for an improved investment climate, effective policies for the real sector and enhanced capacity building for operators in order to aid the growth of the sector.
He identified the lack of adequate machinery and manpower as challenges the growth of the real sector. He, therefore, called for a renewed effort to revitalise the subsector.
[b]The General Secretary, National Union of Textile, Garment and Tailoring Workers, Isa Aremu, commended the government for the intervention effort in the textile sector, noting that though it came late, it was better as many firms had been revived.
He said, “When the textile industry was still vibrant, a single firm could generate about 10,000 jobs. However, due to the intervention fund, we have been able to revive some firms. There is a need for an accelerated growth in the sector and this can be achieved through increased funding to the sector.
“Presently, 58 companies are managing N10bn, while AMCON has spent about N5.6tn on rescued banks. This gesture can also be replicated in the real sector if the desired growth and employment generation will be achieved.”
He, therefore, urged BoI to increase the tenor rate for loans sought by firms in the real sector in order to aid attractiveness of the loans to the companies and foster development.
“A drop in interest rates for the real sector will foster its growth. I believe we can work towards a zero per cent interest rate if we set our mind towards it”, he added.
On efforts to encourage the subsector’s development, he said, “We are working through the Standards Organisation of Nigeria, to reduce the dumping of sub-standard goods into the country.
“Some of these goods include textiles and apparels. We are also exploring diplomatic channels through our Trade Ambassador at the World Trade Organisation. To ensure increase in power supply, we are working with the Ministry of Power to ensure 10 industrial cities in the country have, at least, 18 hours of uninterrupted power supply by first quarter of next year (2013).
He added, “Our aspiration for the textile and apparel industry is to increase its domestic market share from its present position of 12 per cent to 25 per cent by 2020. We also expect this sector to create over 60,000 direct jobs within this period.
“To achieve this, the strategic thrust requires reviving the entire value chain. This includes strengthening the base by boosting cotton production for use in the domestic sector and potential exports, supporting existing players to expand their current operations and attracting strong brands to set up local manufacturing operation in the country. This explains why we have included the sector in the Industrial Revolution Plan which is being[/b] http://www.punchng.com/business/industry/comatose-textiles-cotton-subsector-regains-breath/ 2 Likes |
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