Why textile sector needs lower forex rate, by Karu, TGTSSAN president

There are so many challenges facing the textile industry, which once was the major employer of labour in the country. Comrade Ambi Karu, national president, Textile, Garments and Tailoring Senior Staff Association of Nigeria (TGTSSAN), in this interview, says the industry can regain its lost glory, if government does the needful.

Among several things expected of government is giving zero interest loans to manufacturers in the sector, reduction of the exchange rate, total ban on importation of textile materials, improved power and many others.

Excerpts:

Critical issues imperative to the revival of the sector

The first is our call to the government to reduce the exchange rate, particularly for the survival of the textile sector. As you are aware, Nigeria’s textile sector has been performing dismally as it has for years been faced with several challenges, which affected the companies negatively.

One of those challenges is sourcing foreign exchange at an affordable rate to enable them import machines and other equipment that are needed for the business.

As we speak now, more than 200 textile firms have been shut as a result of systemic challenges, while some reduced their production, staff strength and remuneration of workers.

In fact, more than half of the surviving firms are classified as ailing, which poses serious threat to the survival of the manufacturing sector. Without much discussion on this, you can see that the major challenge facing the sector is the inability of manufacturers to access foreign exchange as a result of its exorbitant rate, coupled with its acute scarcity, which has been restricting the ability of manufacturers to import raw materials for production, and as well as import necessary machines and spare parts.

Infrastructure decay

Without argument, inadequate infrastructure, especially power, has resulted in the closing down of many textile firms, since they cannot operate at high cost of production and remain in business. We believe it is imperative we let the government know the stark reality and at the same time seek government assistance in this area.

In fact, we itemised it in our communiqué as a way of awakening government towards the repositioning and resuscitating the ailing industry for development in the nation’s economy.

Smuggling/counterfeiting

The problem is very easy for the government to address, if there is political will.

There is nothing that stops the government from putting legislation in place to support the industry. In fact, there should be a deliberate government policy to ban importation of cheap textile materials into the country. At the same time, the borders should also be effectively patrolled by Customs officials to prevent smugglers, and at the same time they should be patriotic enough to eschew the act conniving with smugglers to ruin the industry by allowing smuggled materials into the

The ban on importation of foreign materials will protect indigenous companies and I believe they will strive to be better and produce textile of international standard.

‘Made-in-Nigeria’ policy

The “made-in-Nigeria” policy as applied to the auto industry was an aspect of the National Automotive Industry Plan. That plan received broad-based acceptability by stakeholders, including the auto producers. As good as that plan may be, it was not implemented in its letter and spirit. In our own sector, it is not going to be the same, given the fact that the cost of buying textile materials is never the same as that of buying automobiles. And don’t forget that our local textile manufacturers are really competing with their foreign counterparts.

Call for government to establish an agency for textile development in Nigeria

If one reflects back to the earlier status of the industry, we would be convinced that there is need for the government to create an agency that should be given the constitutional mandate to protect Nigeria’s textile industry.

The reason is that the textile industry played a dominant role in the manufacturing sector of the Nigerian economy. When the industry was truly thriving without much challenges as it is today, Nigeria witnessed a boom in the textile sector. At that time, specifically the 1960s to 1970s, textile companies such as Kaduna Textiles, Kano Textiles, United Nigeria Textiles, Aba Textiles, Texlon Nigeria Limited, First Spinners Limited, among others, employed close to a million workers, contributing about 15 percent of the manufacturing sector’s earnings to the GDP of the Nigerian economy. With the boom in the sector, it accounted for over 60 per cent of the textile industry capacity in West Africa. So, if one looks at it from this perspective, there is the urgent need for government to establish an agency to protect the textile sector.

The need for government to formulate policies that would guarantee continuous survival of the textile industry in the country, and ensure the effective implementation through declaration of a “National Dressing Day” in our local fabrics was also itemised as part of the communiqué.

What informed the suggestion

Yes, the call was essential as the implementation would boost the textile industry through influencing Nigerians to wear African fabrics. Apart from a special day, Nigerians should be encouraged to be adorning locally made textile such as ankara to work during weekdays; not only on Fridays, and weekends.

Employers should be encouraged by government to include the African corporate dress code in the daily work wear of their workers, as the initiative would serve as an essential part of one’s identity. As you know, the textile industry is a driver of growth and employment that should be maximised.

Concession on electricity and gas tariff to textile industries

There is nothing wrong for the government to say, OK, let’s give the local textile companies a 90 per cent rebate on cost of generated power.

It is necessary for government to do so because, as it is now, between 30 per cent and 35 per cent of textile and garment manufacturing costs are energy-related expenses. In fact, the government should even consider giving the textile plants zero percent CBN interest loan to build embedded power plants or pipelines to get gas to their factories.

How government can assist the farmers?

Government can come in in many ways. For instance, given the benefits the sector would bring to bear on the country’s economy, there is need for government to assist cotton farmers by reintroducing the marketing board as a way of guaranteeing market for cotton and to encourage them to go into full-scale commercial cotton farming in the country.

READ ALSO: UNILORIN earmarks 5,000 hectares of land for commercial farming

In addition to introducing marketing boards, there is the need for cotton policy re-adjustment, as it has not been easy for them to access loans from banks, due to collateral bottlenecks. Therefore, the Federal Government can address the situation by making it easy for them to access loans through community banks, such as microfinance banks in their various communities.

News Reporter
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