Textile Manufacturers Demand Remittance of N350bn Development Fund

Textile
  • Textile Manufacturers Demand Remittance of N350bn Development Fund

Textile manufacturers in Nigeria are seeking the implementation of the Textile Development Fund Levy policy and the remittance of arrears accrued since its establishment estimated to be N350bn to the sector.

In 1997, the Federal Government set aside 10 percent import levy on imported fabrics to develop operations of local textile manufacturers.

The manufacturers said as of the last calculation in 2015, the arrears amounted to N350bn.

They made the demand amid the decision by the Federal Government to slash import duties on colouring, grease and other items for treatment of textile materials.

The stakeholders maintained that import duties on the items listed by the government were not their main concern but the remittance of the amount accrued from the levy to the textile sector so that stakeholders could access the fund for production purposes.

In a telephone interview with our correspondent, the Director-General, Nigerian Textile Manufacturers Association, Mr. Hamma Kwajaffa, said what the government could do to assist the sector’s growth was to remit the proceeds from the levy to the sector, adding that it would aid stakeholders who were unable to access the N50bn CBN fund introduced last year.

“Not everybody can access the N50bn intervention fund. Out of about 50 people who applied, only 15 people were given,” he said.

Kwajaffa said the sector or its practitioners had never benefitted from this levy since its establishment.

He said, “We are supposed to have 10 percent of any fabric coming into the country as textile development levy. Till date, nothing has come to the coffers of textile manufacturers.

“The levy was to cushion the effect of the infrastructure decay that has impeded our competitiveness with other countries and boost the export of locally-produced fabrics.

“In 2015, the country imported about $4bn worth of fabrics. The development levy from this, just like others, we did not get.”

He disclosed that the proceeds were currently being channelled into the Treasury Single Account and appealed to the government to establish it as a fund that would be kept by the Bank of Industry for practitioners to access at a single-digit interest rate.

Also, the NTMA DG said textile manufacturers faced challenges sourcing polyester locally, adding that Eleme Petrochemical plant was unable to produce enough to meet their demand. He added that another challenge was with sourcing of foreign exchange for importation of essential raw materials.

“This has been a major challenge for the sector because we source forex from the black market and this makes it impossible for us to produce at competitive rate,” he said.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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