Textile Fund: Ensuring speedy disbursement
[2008-4-1]
The recent disclosure by Mr. Charles Ugwuh, minister of commerce and industry, that the Federal Government would start the disbursement of N70 billion textile industry resuscitation fund later this month is commendable. The fund was established by the administration of former President Olusegun Obasanjo on May 23, 2007 for the revival of the country’s ailing textile sector. Under the scheme, the Nigerian Export-Import Bank (Nexim) is expected to raise N70 billion through the issuance of Euro bonds for the purpose of providing loans to textile industry operators at low interest rates. It is also expected that the fund would generate annual sales of about N60 billion, protect 30,000 jobs in the textile industry, 750,000 livelihoods in the cotton production industry and create 200,000 new jobs in both the textile and cotton industries.
Unfortunately, since the establishment of the fund last year, it has not been made available to operators in the textile industry even as allegations were made that the fund may have been diverted to other uses. Testifying at a public hearing organised by the House of Representatives committee on commerce and industry recently, Ugwu said the N70 billion set aside for the revival of the industry was intact attributing the delay in disbursing the bailout fund to government’s decision to first review the problems facing the textile industry in the country in order to decide on the best way to utilise the funds.
The government must ensure that the N70 billion textile revival fund brings a new lease life to the sector. The government should make sure that the benefiting industries are properly monitored to make sure that the loans are used for the required purposes. The textile revival fund should not be used as an opportunity to give loans to unserious textile operators or ghost textile firms whose objectives will not be in consonance with the overall objectives of the fund.
A well-developed textile sector can make Nigeria take advantage of its export quota to America under the Agoa (Africa Growth and Opportunity Act). The Agoa makes it possible for Nigeria and other African countries to export textile materials that are manufactured in Nigeria to America at concessionary duty rates. Nigeria has failed to take advantage of this opportunity because of non-availability of high quality textile products manufactured in Nigeria. The government and the operators should make prudent use of the fund to turn around the textile sector for the better.
Unfortunately, since the establishment of the fund last year, it has not been made available to operators in the textile industry even as allegations were made that the fund may have been diverted to other uses. Testifying at a public hearing organised by the House of Representatives committee on commerce and industry recently, Ugwu said the N70 billion set aside for the revival of the industry was intact attributing the delay in disbursing the bailout fund to government’s decision to first review the problems facing the textile industry in the country in order to decide on the best way to utilise the funds.
The government must ensure that the N70 billion textile revival fund brings a new lease life to the sector. The government should make sure that the benefiting industries are properly monitored to make sure that the loans are used for the required purposes. The textile revival fund should not be used as an opportunity to give loans to unserious textile operators or ghost textile firms whose objectives will not be in consonance with the overall objectives of the fund.
A well-developed textile sector can make Nigeria take advantage of its export quota to America under the Agoa (Africa Growth and Opportunity Act). The Agoa makes it possible for Nigeria and other African countries to export textile materials that are manufactured in Nigeria to America at concessionary duty rates. Nigeria has failed to take advantage of this opportunity because of non-availability of high quality textile products manufactured in Nigeria. The government and the operators should make prudent use of the fund to turn around the textile sector for the better.
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