• Wednesday, May 29, 2024
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Extend N100bn CTG fund to traditional textile firms, NISER tells FG

Experts canvass increase in local production to boast Nigeria’s GDP, minimise unemployment

The Nigeria Institute of Social and Economic Research (NISER) has urged the federal government to extend the N100 Billion Cotton, Textile and Garment (CTG) Fund to traditional textile firms through the Small and Medium Enterprises Development Agency (SMEDAN) and the Bank of Industry (BOI).
Speaking on the findings of his team regarding the challenges affecting the Nigerian textile industry.

Bashir Adelowo Wahab, a senior research fellow for NISER, said activities of the BoI should be strengthened and the procedures for acquiring loan be simplified to enhance easy accessibility.
Wahab urged textile firms in Nigeria to begin to look inwards, in terms of fabricating local technology through investment in research and development (R&D), urging firms to plough back part of their profits to contribute to funding R&D activities to develop local engineering capacity.

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To improve capacity utilization of firms, the NISER researcher canvassed the provision of critical infrastructure notably electricity, water, and transport, as a matter of topmost priority by the government. While tasking Nigerian textile firms not to compromise on quality and standards, the NISER research fellow remarked that the ongoing efforts of the African Growth and Opportunity Act (AGOA) in training the traditional cloth weavers in the standardisation and packaging of textile products for competitiveness should be encouraged and strengthened as it is potent for removing the constraints on the competitiveness of the traditional textile firms.

In its monthly Research Seminar lecture with the theme ‘Competitiveness of the Nigeria Textile Industry’, NISER attributed the decline in the number of firms in the modern textile sector partly to inconsistent policies of various governments, including the World Trade Organisation (WTO) agreement which allowed inferior or low-quality textile products to flood the country.
NISER also ascribed the challenges of the industry to ineffective monetary policy, and exchange rate volatility affected the importation of raw materials used in the production of textile products.

According to the Economic Policy Research Department of NISER, the N100billion CTG Revival Fund assisted some textile firms to replace some old machines but remarked that the fund is not enough for the required bail-out of the sector. It also observed that the interest rate on loans from commercial banks and microfinance banks are not affordable and thus makes it difficult to acquire a loan to expand their businesses.

READ ALSO: Industrialisation: Lessons from India’s model

It was further suggested that the Nigerian textile firms should be encouraged to explore other African regional markets since there is a growing market in neighbouring countries “as increased markets outlets and patronage will trigger the flow of foreign exchange into the sector which will boost its development and promote its competitiveness.

The NISER group recalled that the contribution of Nigerian textile industry accounted for 25per cent of manufacturing employment between 1980 and 1999 and that until the 1980s, the textile industry was the biggest manufacturing industry in Nigeria, and the third biggest in the whole of Africa, after Egypt and South Africa.

“About 128 modern textile firms were operating in Nigeria in the 1980s but this decreased to less than 45 in 2008 and as of 2015, there were only 33 active firms. Presently, less than 30 modern textile firms are in operation. The two categories of firms operating in the textile industry (modern and traditional textile firms) were covered.”

 

Akinremi Feyisipo, Ibadan