Can CBN’s Latest NGN 19 Bn Loan Bring Back The Glory Days For Nigeria’s Textile Industry?
Back in the 1980s, Nigeria’s textile industry was head and shoulders above all others in Africa with over 180 textile mills in operation, employing nearly 500,000 people and contributing more than 25 percent of the workforce of the manufacturing sector.
But as the years rolled by, things pretty much went downhill. As the governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, puts it, Nigeria’s textile industry is now entirely different from what it used to be. And most of the factories have halted operations with only 25 textile factories still operational currently.
It is on that note that the CBN has moved to revive the Nigerian textile industry and bring back the glory days by approving a loan of NGN 19.18 Bn to 9 cotton-producing firms.
The CBN governor made this known while signing two memoranda of understanding in Abuja on Tuesday, October 29.
The first agreement was between the National Cotton Association of Nigeria and Ginning Companies to guarantee steady off-take and processing of cotton lint and cotton seeds.
The other MoU was between the Nigerian Textile Manufacturers Association and the Armed Forces of Nigeria, Nigeria Police, paramilitary institutions and the National Youth Service Corps.
Emefiele said, through the loan, the CBN aims to enable the firms to retool their processing plants. He stated that the loan, which would be disbursed at a single-digit interest rate, would assist in sustaining their operations and improving their production capacity.
The CBN Governor also went on to disclose that the same support would be extended to the textile and garment firms.
“We are improving the linkage between cotton farmers and ginneries, by ensuring that ginneries are able to off-take the high-quality cotton produced by these farmers.
“In this regard, approval to a tune of N19.18bn has been granted to finance nine ginneries with a view to retooling their processing plants, while providing them with improved access to finance at single digit interest rate,” he said.
It was Emefiele’s submission that the MoU was a step in the right direction towards the implementation of Executive Order 003, in which President Muhammadu Buhari directed all ministries, departments and agencies to give preference to local content in their procurement of goods and services.
The intervention in the cotton industry had previously taken about NGN 50 Bn and as by Emefiele’s estimation, that sum would run into NGN 100 Bn eventually if the sector is to be restored to anywhere near its heydays.
With that in mind, Emefiele revealed putting together a committee of the CBN, Federal Ministries of Agriculture and Rural Development; Water Resources; Industry, Trade and Investment, and the governments of Kano, Kaduna, Katsina, Gombe and Zamfara States, called the Textile Revival Implementation Committee, to give the sector a new lease of life.
Featured Image Courtesy: ApparelResources
