CBN To Provide Lower Interest Rate Loans To Textile Firms

 

 

The Central Bank of Nigeria (CBN) has promised to provide single-digit interest rate and long-tenored loans to operators in the textile industry as part of efforts to revive the ailing sector.

CBN Governor, Godwin Emefiele, who gave this assurance during a meeting with cotton, textile and garment industry stakeholders in Lagos recently, said the present administration is determined to revive the country’s textile industry.

“Mr. President is committed to the rejuvenation and revival of this sector and he is desirous of bringing this industry back to life,” he stated.

Emefiele lamented that it was disheartening that an industry that literally touched the fabric of the entire country now pales in the shadow of its past success.

“A sub-sector that once employed over one million hardworking Nigerians is now almost completely dominated by imports from Asia. We are all aware of the challenges that have beset and continue to plague the industry and I am under no illusion that this meeting will immediately resolve these issues.

“The central bank under my leadership is prescribing to work with the industry to come up with holistic solutions for the long-term sustainable development of the sector. I can assure you that the Bank is ready to provide funding under our Real Sector Support Facility for the industry.

“This i my humble opinion is the crux of this meeting, which I will like us to keenly deliberate upon. How for instance, can we get cotton farmers to increase their output, reducing dependency on imports? Or how can all stakeholders form a strong advocacy to create a more enabling environment for the sector to thrive once again? I am confident that with our collective efforts, we can finally change the sad narrative about this industry,” he added.

The CBN governor pointed out that the human needs for clothing and the competitive advantage of the country made the sector formidable and key in our path to industrialisation in the 1970s and 1980s.

During this era, he noted, that the textile industries were spread across the country, with many mills located in Kaduna, Lagos, Funtua, Gusau, Asaba, Aba, Kano and a host of other cities. There were well over 159 vibrant textile mills operating at close to full production capacities.

“Indeed, Kaduna was known as the ‘Textile City’ of the country, because of the preponderance of huge integrated textile mills domiciled in the city.

“Unfortunately, these glory days are now distant memories. I recall with bittersweet memories, many years ago as a credit manager when I transversed Lagos, going from Anthony Village, to Oshodi all the way down to Amuwo Odofin and Mile 2, appraising loan requests from textile companies.

“As a credit manager, it was a race against time, as if you didn’t have a textile company in your loan portfolio you were deemed to have underperformed.

“Now, these days, as I drive past these factory locations, I shudder with sadness at the abandoned and dilapidated structures. Indeed, many of the premises have been leased or sold to other companies, who are involved in importation of various commodities like rice, tomatoes, textiles, dairy, products and even automobiles.

“Sadly, from a pinnacle of 150 vibrant mills, the sector can only boast of less than 20 textile companies still managing to stay afloat. While the resolutions of many of these challenges are well outside the purview of the CBN, it will be expedient to explain how the Bank can complement the effort of other agencies in ameliorating these challenges.

“Key among these issues has been policy somersault by various governments. The country today officially and unofficially imports millions of dollars of textile products into the country. Since the CBN has no mandate to outrightly ban the importation of any product into the country, the Bank recently included textiles as one of the 41 items excluded from forex sales from the Nigerian forex market,” he added.

 

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