The Acting Managing Director, Bank of Industry, Mr. Waheed Olagunju, says CBN has introduced a N50 billion intervention facility to revive the Cotton, Textile and Garment (CTG) sector.
Olagunju said this at the cotton, textile and garment stakeholders’ forum on Thursday in Abuja.
He said that the N50 billion intervention fund was to facilitate takeover of the existing debts and to provide additional long term loans and working capital to existing companies in the CTG sector.
“The bank has to date approved loans of over N50 billion comprising debt takeover, term loan and working capital to 40 beneficiaries across the value chain in line with the CBN guideline on the fund.
“A total of N13.37 billion released by CBN has been disbursed to the various beneficiaries as at September 30, 2016.
“I hope that this forum will focus more on proffering pragmatic solutions to the challenges facing the CTG sector.
“It will also foster mutually beneficial relationship, networking and knowledge sharing among stakeholders on the current and future trends in the cotton value chain not only in Nigeria but around the world,’’ Olagunju said.
“It is meant to provide additional funds to kick start operation and keep operation going and most importantly to retain the staff they have and possibly employ more.
“We need more and more intervention, as we all know the economy is officially in recession and in recessionary times like this, there is need for interventions to help the private sector to overcome the challenges.
He said in 2009, the Federal Government approved and authorised the Debt Management Office to issue a long-term bond for the N100 billion to BOI at a coupon rate of five per cent for on-lending to business under CTG.
Olagunju said that the bank also approved loans to 70 projects valued at about N60 billion under the cotton value chain.
“The Federal Government, in October 2013, magnanimously converted the loan to equity, which assisted the bank to restructure the loans by tenor elongation and reduced the interest rate further to four per cent,’’ he said.
Olagunju said that the dwindling fortunes of the textile industry started in the 80s as the industry began to struggle with high production cost, taxes and poor infrastructure, especially poor power supply.
He said that the situation deteriorated in 1997 when the government lifted the ban on importation of textiles against stiff but unsuccessful resistance from industry operators.
The BoI chief explained that consequently the market got flooded with imported textile goods as a result of the suspension of the ban.
He said that this led to decline in sales, retrenchment of workforce in the industry and ultimately to the shutdown of many local textile factories.
The Minister of State for Trade and Investment, Hajia Aisha Abubakar, said the Federal Government was making efforts to transform the cotton, textile and garment sector by 2018.
Abubakar said that the Cross River garment factory had the capacity to employ over 3,000 workers per shift, adding that government would do everything possible to create employment for its youths.
“I want to assure you that we are working out something to move the industry forward; by 2018 there will be change in the CTG sector.
“We are the answers to our problem; be the change you are looking for. We need to come out with plans to ensure change is seen.’’