Bailout for textile industry

Recently, the Governor, Central Bank of Nigeria, Mr.Godwin Emefiele disclosed that the apex bank was planning a fresh bailout for the textile industry in order to revive it as a major employer of labour. He revealed that the intervention fund would come in a single-digit interest rate and long-tenured loans to investors in the sector, particularly those in the cotton and garment segments. According to him, the CBN is desirous to revive the textile industry and place it on the path of sustainable growth. Mr. Emefiele lamented a situation whereby a sub-sector known  in the past to have employed more than one million Nigerians  is not only comatose but has been overrun by cheap imports  from Asia  and other developing countries of the world.
Like the CBN boss, we are also pained at this sad development and welcome in all totality any moves by the authorities to change the fortunes of the industry for good.  Our agony is exacerbated by the fact that while those charged with protecting our  the industry are looking the other way, smugglers are busy swamping the country with all manner of inferior  textiles from all over the world.  This situation is responsible for the closure of hundreds of textile mills in the country with attendant job losses and mass unemployment. Times was when cities such as Kaduna, Onitsha,Aba, Kano, Asaba,Funtua, Gusau, Lagos and a host of others were known mostly for their textile mills that employed hundreds of thousands of workers. Today, those mills are not only abandoned, they stand as sad monuments to their once glorious past. In the golden era of Nigeria’s textile industry between 1985 and 1991, the sector recorded an annual growth of 67 per cent as at
1991 and employed 25 per cent workers in the nation’s manufacturing sector.
In that period there were about 190 textile companies, employing more than a million people and accounted for over 60 per cent of the textile industry capacity in West Africa.  However, their fortunes took a turn for the worst in the early 1990’s. From the highpoint of 190 thriving textile companies, the number reduced to almost zero, with giants such as United Nigeria going under due to harsh operating environment. Following this the Federal Government set up the N100bn intervention fund for the sub-sector in 2009 to be disbursed by the Bank of Industry (BOI). Unfortunately, the fund is yet to revive the fortunes of the textile industry. According to the Coalition of Closed Unpaid Textiles Workers in Kaduna, an estimated 700, 000 of their colleagues are still jobless. Investigations reveal that Nigeria imports more than N400bn worth of textiles into the country.
Sadly, most of these textiles and garments are imported without paying the required duties and taxes, thereby making the country to incur annual losses of N80billion. Investigations also revealed that some of those behind the smuggling of textile products are employees and operators of the textile firms that have closed shop. There is no gainsaying the fact that revival of the textile industry would revive cotton production and attendant jobs that go with it. For now, local demand of cotton has declined to 40,000 tons, while local production at present outstrips demand, forcing most farmers to export their produce to countries such as Bangladesh, Pakistan and Vietnam. We therefore urge the Federal Government to adopt a protectionist policy for the textile sector so as to encourage the revival. It is fact that problems of the industry go beyond funding but more to do with the hostile operating environment that must be rectified for the  sector  to turn
around.