It is (textile) industry, stupid!
With 2019 around the corner, the season of electioneering is here. As usual Nigeria is never short of candidates, but candid programme of socio economic transformation. No defecting politician ever pretends he or she does so because of some policy disagreement. Those who stay tight pay no lip service to nation building and national development […]
With 2019 around the corner, the season of electioneering is here. As usual Nigeria is never short of candidates, but candid programme of socio economic transformation. No defecting politician ever pretends he or she does so because of some policy disagreement. Those who stay tight pay no lip service to nation building and national development either. Policies and manifestos, their feet!
It was refreshing that at weekend critical stakeholders in textile, garment and cotton value chains converged in Kaduna – precisely at Fifth Chukker Polo and Country Club, Mararaba Jos – to change Nigerian narrative from politics of attrition, at with war with robust discourse on how to reinvent Nigeria textile industry. It was a forum for the beneficiaries of the commendable Central Bank of Nigeria (CBN)/Bank of Industry (BOI) Cotton, Textile and Garment (CTG) policy. Yours comradely was at the forum well attended by many Nigerian investors who despite numerous challenges facing ease of business still kept faith production as distinct with smuggling.
Some of the stakeholders included Alhaji Salmanu Abdullahi, Group Managing Director, Cotton Ginning Company Ltd, Kaduna, Mr. Felix Egbamuno, Chairman, Femro 3 Nigeria Ltd, Lagos, Alhaji Suleiman I. Umar, Tofa Textiles Ltd, Kano, AlhajiIliya Saleh, Managing Director, Zaria Industries Ltd, Zaria, Alhaji Ibrahim Muazu Isa, Funtua Textile Ltd, Funtua, Mohammed Chaady, African Textile Manufacturers Ltd, Kano, Mr. AnibeAchimugu, Arewa Cotton, Abuja, AmoduAchema, Arewa Cotton, Abuja, Mr. M.O. Oyedepo, MATAD Group, Kaduna, Alhaji Aminu Makaranta, Makaranta Ginnery, Gusau, Uwaise Aminu Makaranta, Makaranta Ginnery, Gusau, Alhaji Sani Dahiru, Inta General Enterprises, Gusau Alhaji Adamu Atta, Chairman, MATAD Group, Kaduna, Alhaji Garba Dikko, Matad Group, Kaduna, Mr. Frank Chiu, Sanama Garment Training Centre and Madam Omolara of Crown garment and Mr. Barbanas, Director representing Minister of state for Industry, Hadjia Aisha Abubakar.
Some of the issues raised at the earlier June meeting are worthy of reproducing here for most government officials who have the responsibility to revive textile industry in their states.
“Low Cotton production: persistent reduction in cotton production in the country without any effort being put in place to stop the trend. The main factor being the problem of poor yield of the present planting seeds available. Other reasons include high cost of cotton production because of the need for spraying chemicals, labour and capital intensiveness of cotton production with little or no financial access for the farmers. There is also the problem of marketing and pricing of cotton by the farmers. Because of these, cotton farmers are forced to produce competing crops thereby reducing the production of cotton to unbelievable low levels. Because of this singular factor, only about 10 ginneries out of 52 ginneries are operating and those operating are doing so at less than 20% of their installed capacities.
Quality of Nigerian cotton: Over the years, the Nigerian cotton quality has been affected because of adulteration and the mode of bagging. This has led to Nigerian cotton being discounted in the international market instead of the premium prices that it used to enjoy in the past.
Very Low demand for Cotton by the Domestic Textile Mills: The Ginneries are confronted with low demands by the local textile mills because of the challenges the textile mills are confronted with and the Ginners are compelled to source for export market.
Vagaries of cotton price in the international market: The price of cotton in the international market is determined by forces of demand and supply as well as international politics and dynamics. For instance, this season, because of the frosty relationship between China-USA, China had placed some tariff on US export to China, cotton inclusive. As a result of this, traditional buyers of African cotton in Asia have opted to buy cotton from India because of lower freight rate when compared with freight from African countries and that is affecting the demand for African cotton negatively especially that of Nigeria.
High cost of export operations because of the Apapa Road challenges: Exporters of cotton are forced to stuff cotton outside the port so incurring double cost on transportation to the Port. This is besides the long delays of trucks moving containers to the Port because of very bad road to Apapa. It takes a week or more for a truck from the North to get to the Port. Because of the long delays exporters are not able to meet shipping schedules so therefore faced with the attendant risk of defaulting on export contracts.
Government’s policy somersault: inconsistency of government policies especially on FOREX. No cognizance is taken of the real sector like ours when Government intervened in Forex market thereby causing huge loses to exporters.
Security Challenges: Many farmers especially in the North East are out of cotton production because of security problems. Many commercial farmers have deserted their farms for fear of attack and kidnapping.
Total lack of Power supply: Virtually all the Ginneries are located in the semi-urban centers where there is no power supply. They operate twenty-four hours on generators. This constitutes over 40% of their costs of their operations. Lack of encouragement from the states governments to support the operations of the Ginneries in the various states where they operate. Nothing is done to the farmers by the cotton producing states to boost the farmers’ efforts and morale to produce. The functional textile mills are operating at less than 20% of their installed capacity because of many challenges which include the following: Smuggling and counterfeiting of textile products into the country has failed to be checked despite several measures put in place by government. This is affecting the marketing of the mills. The mills are not able to compete with the smuggled textile products, meaning total inability of government to check smuggling. Government to intervene in the restructuring of the existing loan facilities in such a way that ample time would be provided for the various challenges confronting the sector to be addressed so that the sector become viable enough to meet its obligations; That the tenure of the facilities including working capital be elongated to 30 years; That there be a moratorium of 5 years; That the interest be reduced to not more than 2% (two percent); That the accrued interests before the new package is effected, be completely waived; That the repayments reflect the seasonal nature of some sectors of the industry.”