Daily Trust (Abuja)
27 October 2009
Abuja — The Olusegun Obasanjo administration announced with considerable flourish the launch of what it claimed would be a comprehensive strategy to resuscitate ailing textile firms in various parts of the country. To that end, it proposed a 70 billion naira fund.
The fund, according to administration officials, would be disbursed to refurbish machinery or replace obsolete ones, pay off the huge debts that the textile factories had accumulated, and defray several months (in some cases years) of unpaid staff emoluments. There were hopes that at last the government had noticed the acute deprivations that had befallen the factories and their staff members, and had taken steps to address them. Expectations turned to despair as the promised money never materialized.
The government went through the motion of assuring an anxious nation that the money was intact, available and would be disbursed. Beyond these assurances, nothing else was heard of the textile revival fund, until the administration left office. Then all of a sudden, the Federal Government announced last week that it was in the process of launching a 100 billion naira Textile and Garment Development Scheme. The Minister of State for Commerce and Industry, Mr. Humphrey Abah, said the scheme would be the most comprehensive and realistic initiative at reviving a sector that was once the second highest employer of labour after government. He spoke at the first international conference on the sector in Lagos. The minister noted that the scheme would cover the entire cotton and garment production chain.
In the 1980s, the textile sector generated a turnover of about $9 billion from 175 mills spread across the country, employing more than 700,000 personnel and accounting for 25% of Nigerian's manufacturing sector. However, because of various factors, such as high production cost and intense competition from countries in Asia, most of these factories have shut down. There are currently only about 24 mills in operation, employing less than 25,000 and accounting for just 5% of manufacturing value addition.
Government has promised to apply appropriate measures so that only competitive and viable companies access the fund which would be lent out at a single-digit interest rate. The fund also would provide for the immediate establishment of electric power generating plants close to firms to be involved in the entire chain value. Deliberate steps would be taken to promote the establishment of garment manufacturing firms in cotton producing areas, the minister stressed.
Although the government's announcement on textile revival is laudable, it should not be another hope dashed. By the way, what is the fate of the 70 billion naira intervention fund for the sector proposed by Obasanjo? Is the new package being proposed now an increase of 30 billion naira over that, or an entirely new one?
We also would like the government to tell us what is the source of the proposed fund and which banks should be in charge if its disbursement - Bank of Industry or NEXIM? Which aspect of textile is the money targeted at, to revive - electricity, quality control, equipment, market promotion or all of them? This policy should not be a reflection of some government policies that are without working details. Textiles in Nigeria must improve capacity for export through good quality if it must survive among other competing qualities in the global market. Patriotism to buying made-in Nigeria products, (textiles inclusive) depends largely on their quality and competitive pricing, and not slogans. If the recently-launched Buy-Nigerian campaign is to succeed, quality management and assurance must be emphasized. We welcome the government's new resolve to tackle the problem of the textile industry in Nigeria, and hope that it would not turn out to be another political gimmick.
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