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FG targets fresh N255bn investment in textile industry

By on February 17, 2015

The Federal Government is targeting cumulative investments of N255bn over the next five years through the implementation of the National Cotton, Textile and Garment Policy.

The figure is contained in the policy document for the sector prepared by the Ministry of Industry, Trade and Investment.

In the document exclusively obtained by our correspondent in Abuja on Friday, the government said the country would benefit significantly from the implementation of the policy, which was launched on January 20 this year.

The National Cotton, Textile and Garment Policy is aimed at revitalising and boosting the growth and development of the cotton, textile and garment industry.

The main thrust of the policy is to reposition the sector as the second largest employer of labour and a revenue earner for the government.

The document also stated that the economy would also record savings of $2bn in foreign exchange, which is currently being spent on the importation textiles and garments.

It also stated that the policy would increase the level of direct employment in the sector from the current 24,000 to 50,000 persons by the end of this year, and 100,000 by 2017.

Indirect employment, it added, was also expected to increase from the current level of 650,000 people to one million people by 2015, and 1.3 million people by 2017.

The document read in part, “Government is committed to providing a conducive environment wherein the Nigerian CTG sub-sector can realise its full potential. Key benefits of a transformed CTG sector to the Nigerian economy include significant foreign exchange savings by reducing the estimated $2bn currently spent importing the bulk of our textile and garment needs.

“Export earnings are also expected to increase to at least $3bn annually or 0.5 per cent of the global share of international trade in textiles and garments in five years. FDI into the Nigerian textiles and garment sector will increase to as high as N255bn cumulatively over the next five years.”

The document also projected that the implementation of the policy would lead to an increase in seed cotton production in the short-term from 200,000 metric tonnes to 500,000 metric tonnes by the end of this year.

To boost patronage of indigenous fabrics, the government stated that all military, para-military agencies and government schools were to purchase only made-in-Nigeria textiles and garments for their uniforms.

In addition, the policy stipulates that the private sector, especially schools, should be encouraged to source their materials locally.

In the area of standards, the policy stated that the Ministry of Industry, Trade and Investment was already taking actions to ensure that adequate standards were developed in the sector.

Some of the measures are that all major textile importers must be registered by the Standards Organisation of Nigeria to reduce dumping of substandard goods on the country; and a bilateral agreement between SON and its counterpart in China to significantly reduce counterfeiting.

The policy also states that all cotton, textile and garment companies operating in Nigeria are to register their trademarks with the relevant authorities.

It said while these measures would increase the competitiveness of the CTG firms and discourage smuggling, a presidential task force made up of the MITI, Budget Office of the Federation, Nigerian Custom Service, SON and Manufacturers Association of Nigeria would be constituted.

The task force, it added, would have powers to confiscate goods smuggled into the country.

Commenting on the policy, the Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, said it would address all bottlenecks inhibiting the growth and development of the industry.

He added that it would improve the quality, quantity, production capacity, marketing and competitiveness of the players across the entire value chain; control the influx of fake and sub-standard textiles and garments into Nigeria; and improve the competitiveness of the CTG firms across the nation.

Aganga said, “Extensive stakeholder consultation gave birth to the National Cotton, Textile and Garment Policy, which was approved by the Federal Executive Council on December 17, 2014. In 2010, the Federal Government introduced the N100bn Cotton, Textile and Garment Revival Fund managed by the Bank of Industry to reverse the ugly trend of progressive collapse of the textile industry.

“The BoI, in conjunction with the United Nations Industrial Development Organisation, has appraised the performance of the fund, indicating that a substantial portion of it has been successfully disbursed.

“We have, however, obtained presidential approval for some aspects of the policy, such as the conversion of the loan given to the BoI by the Federal Government for on-lending to CTG companies into Federal Government’s equity in the bank.

“This will make it possible for the BoI to elongate the period of this fund, which was billed to end in 2017.”

The minister added, “It further puts the BoI in a position to review the interest rate downwards. Already, a number of the beneficiaries of the CTG Fund have had their loan tenor elongated, while their interest rates have been reviewed downwards.

“This will go a long way in alleviating the burden on CTG companies, especially those in the northern part of the country.”

He explained that the Federal Government had given priority attention to the revitalisation of the CTG industry due to its huge job creation potential.

The President, MAN, Dr. Frank Jacobs, described the new CTG policy as “the requisite compass” for the revitalisation and growth of the cotton, textile and garment industry in Nigeria.

He added that MAN would do everything possible to support the implementation of the policy.

“For us, the CTG policy is another milestone towards Nigeria’s industrial revolution because it shows a clear and integrated approach towards complete revitalisation and growth of the industry across the entire value chain,” Jacobs said.

In his comments, the Chairman, Nigeria Textile Manufacturers Association, Senator Walid Jibrin, said, “In over 40 years of working in the textile industry, this is the first time we are having a truly realistic and comprehensive policy for the sector.”

 

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