You need to active Javascript on your
BusinessDay
Nigeria's leading finance and market intelligence news report.

CBN approves N19.18bn grant to refurbish ginnery plants in Nigeria

...President’s Executive Order 003 kicks off as CBN, others sign MOU

 

The Central Bank of Nigeria (CBN) on Tuesday announced its approval  of N19.18 billion to finance the refurbishment of nine ginneries processing plants to boost cotton and textile production in Nigeria.

The Nigerian cotton, textiles and garment sector has faced challenges of rising operating cost, weak sales due to high  energy cost of  running factories, smuggling of textile goods as well as poor access  to finance which has led to the closure of over 150 textile firms as well as loss of over 2 million jobs in Nigeria.

Godwin Emefiele, Governor of the central bank, speaking in Abuja, said that efforts were ongoing to provide improved access to finance at single-digit interest rate as well as provide linkage between cotton farmers and ginneries, by ensuring that ginneries are able to off-take the high-quality cotton produced by these farmers.

“Approval to a tune of N19.18billion has been granted to finance nine (9) ginneries with a view to retooling their processing plants, while providing them with improved access to finance at single-digit interest rate. This is to help sustain their operations and improve their production capacity, the same support will be extended to the textile and garment firms,” he said.

The governor spoke as the uniform services and Nigeria textile and garment  manufacturers association, as well as national cotton association of  Nigeria and Ginners association of Nigeria signed the memorandum of understanding, said that the smuggling of textile goods was estimated to have cost the nation an import bill of over $4billion annually on textile and apparel as a large proportion of clothing materials are being imported from Asia and countries in Europe.

He added that investment in local textile and garment factories had been made to retool and revive the sector to produce assorted uniforms for the uniformed services to meet international standards through local sourcing of materials.

Read also:Newly licensed Globus Bank eyes N50bn capital raise in 18 months

“Back in May 2019, we took the first step in this journey in Katsina State with the flag-off of input distribution to 150,000 cotton farmers, cultivating 150,000 hectares in 23 States of the Federation. Currently the cotton planted by these hardworking farmers has begun fruiting and will soon be ready for off-taking from the Month of November”.

“We have also constituted a Textile Revival Implementation Committee (TRIC) which includes 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. This Committee is driving the initiative to achieve self-sufficiency in cotton production and textile materials within a span of 3 years”.

“We have held consultative meetings with State Governments on ways to reduce the operational cost of running textile factories within their respective States. State Governments have indicated their interest in providing captive power plants in industrial areas where textile manufacturers operate, in order to enhance their productivity and reduce the operational cost of running their factories”.

Emefiele said that the ceremony was a giant leap towards the implementation of the presidential Executive Order 003, which directed all MDAs to comply with by granting preference to local content in their procurement of goods and services.

“We believe that through these initiatives, all the businesses along the cotton- textile value chain can come alive again thereby helping to improve the economy of our states”, he said

Grace Adereti, President, Nigeria textile and garment association of Nigeria, in her remarks said that the initiative was a welcome development as it would lead to further boost of textile industry as well as the Nigeria economy.

” We commend the government’s effort to see that the industry survives; we will continue to work to ensure our products are of high quality”.

Rauf Aregbesola, minister of Interior, said that the initiative would further enhance the nation’s capacity of production as well as boost its foreign reserve as it will reduce spendings on importation.

” This is an avenue for us to promote our made in Nigeria produce, our problem is revenue not debt. Every effort to conserve our foreign exchange must be applauded”.

Abubakar Sadiq, Chief of Air staff in his remark commended the efforts of the Central Bank stating that the initiative will further increase the value of the Nigeria economy as well improve easy access to uniforms in all categories as they will be locally sourced.

 

 

Whatsapp mobile

Get real time updates directly on you device, subscribe now.