The weight on back of textile industry
Nigeria’s EFCC led by its Chairman, Mrs. Farida Waziri also threatened to begin arrest and prosecution of the already published names of the big debtors of the five banks should any of them failed to repay their debts after the expiration of the one week ultimatum effective 18th August 2009. In spite of the various […]
Nigeria’s EFCC led by its Chairman, Mrs. Farida Waziri also threatened to begin arrest and prosecution of the already published names of the big debtors of the five banks should any of them failed to repay their debts after the expiration of the one week ultimatum effective 18th August 2009.
In spite of the various commendations however, one should not be carried away by the good intention to save the economy through the vibrant steps taken by both the CBN and EFCC so far on the five indebted banks. It is indeed most unfortunate that the banks that should have saved the endemic situation of our ailing textile industries, which have been crying profusely as a result of smuggling and high cost of infrastructure have indeed allowed a colossal amount of N746 billion to a near waste. The question is, where were these five banks with their N746 billion when the Federal Government of Nigeria had been searching for only N70 billion to assist the textile industries towards overcoming their plights in form of textile revival loan? Wouldn’t it have been better for any of the five banks to volunteer to give out the N70 billion loans to the ailing textile sector for its revival with the government as guarantor than wasting the same amount on individuals that specialise in bank fraud?
It would be recalled that at the Public Hearing on Textile Revival organized by the Senate, which took place on 16th July 2009, the government hinted through the Minister of Commerce and Industry that it had for the umpteenth time proposed to give N100 billion as textile revival fund to Manufacturers in the Daily trust of 17th July 2009. The question again is where was the N70 billion textile revival funds that the government so much talked about for two years? Is it a case of the more we see, the less we understand? For instance, we are told that a Senator who has never sponsored a single bill received N500 million in two years as allowance. We have 108 senators in the senate. It shows therefore that N54 billion was paid to them as allowance in two years. Yet, the country could not raise N70 billion with one digit interest for the textile industries in Nigeria. This is a sector that is second in employment generation after government and which at the same time cannot be compared with the employment generation of the banking sector.
Because the Federal Government of Nigeria could not bail out the textile industries from their precarious problems, some of them who are still struggling to survive resorted to their individual banks to take loans of huge amount of interest rate of about 25 to 30% to be able to meet with the required standards. It is therefore not surprising that textile industry like the African Textile Manufacturers Ltd, one of the extremely few surviving composite textile industries located in Challawa Industrial Estate, Kano with about 1,850 employees is one of the companies and individual that is indebted to one of the five banks to the tune of about N896,848,126, which came about as a result of extremely high interest rate. This debt when compared to the huge amount of the company’s capital investment, it is just like a drop in the ocean.
It is not long ago, the company downsized its production capacity and now, the Central Bank of Nigeria and Economic/Financial Crime Commission is asking it to repay its bank debt of N896,848,126 within one week, failure of which its Chief Promoter will be sent to ‘jail’ for daring to invest in a country as ours.
As I said, CBN and EFCC have done well in their action so far taken at recovering the bank debts. But, methinks that individual merit should be adopted in the present approach to avoid using a sledge harmer to kill some mosquitoes. What am I saying? I am saying that before the CBN and EFCC finally fill their darkrooms with bank debtors, the history of such debts and how they are invested should be a subject of consideration so that genuine investors will not have any form of regret in investing in a country that is only interested in jailing bank debtors, performing or non-performing.
Saka Raji Audu writes from Kano and can be reached on his email: [email protected]