Textile manufacturers in the country have appealed to the Federal Government to stop selling gas to local industries in dollars.
According to them, the payment of the gas tariff in the United States dollar is counter-productive to local manufacturers, a development that has made the commodity unaffordable to many businesses.
Speaking under the aegis of the Nigerian Textile Manufacturers Association, operators in the sector stressed that the gas being supplied to the local industries was costlier than what the commodity was selling for in the international market.
“The current domestic tariff at $7.38/mmscf is three times the price of gas in the international market. There is a need to review the tariff on gas supplied to the industries in naira, which should be affordable.”
The Federal Ministry of Petroleum Resources and the Ministry of Power, Works and Housing on several occasions had made it clear that the cost of gas to the power plants was lower than what industrial gas users were paying.
Both ministries also stated that gas was an international commodity and, hence, it was being priced in the US dollar.
Kwajaffa, however, stated that despite the government’s pledge to revive the textile sector, the reality on ground was worrisome.
He said the prevailing harsh environment had no doubt dealt a serious blow to the already fragile sector, adding that Nigeria was currently spending over $4bn annually to import textiles and ready-made clothing.
“Our country has the potential to produce for the local market, export to the ECOWAS market of 175 million people, and to the developed world, but smuggled goods continue to flood major textile markets in Kantin Kwari, Kano, Balogun and Oshodi in Lagos,” he stated.
Kwajaffa noted that a number of recommendations on how to revive the sector had been made available to the government, adding that urgent steps must be taken to save the industry from collapse.
He said, “Scarcity of black oil has crippled the operations of the textile mills in the North. There is a need to ensure availability of the fuel to the textile mills by way of direct allocation from the Kaduna and other refineries. Consistent supply of certified seeds is required to ensure adequate supply of cotton to the local textile industry
“Under the dual exchange rate policy being currently pursued, the CBN should allocate forex at the official rate to textile manufacturers for meeting the need for import of essential raw materials by the textile mills. The need for import substitution has never been felt stronger before. The government should persuade its MDAs to source all their uniforms from the local textile mills.
“The scheme for the supply of free meals to schoolchildren should be extended to free uniforms to be procured by the government from local textile mills. Government should check the influx of smuggled goods and take action against counterfeit textiles, which fake the Nigerian trademarks.”
CBN Maintains 11.5 Percent Monetary Policy Rate, Leaves Other Ratios Unchanged
The Central Bank of Nigeria led Monetary Policy Committee (MPC) has left the interest rate unchanged at 11.5 percent to further stimulate activities in the real sector of the economy.
Godwin Emefiele, the Governor of Central Bank of Nigeria disclosed this at the end of the MPC meeting on Tuesday in Abuja.
He said other parameters, the Cash Reserve Ratio (CRR), Liquidity ratio, and asymmetric corridor, were left unchanged.
According to the Governor, the committee voted unanimously to maintain the current monetary policy and attributed the surge in inflation to structural policies, the increase in pump price and the recent #EndSARS protest.
Highlights of CBN-MPC’s Decision
- MPR was kept at 11.50%
- The asymmetric corridor of +100/-700 basis points around the MPR
- CRR was retained at 27.5%
- Liquid Ratio was also kept at 30%
Unity Bank Grew Gross Earnings by 8 Percent to N34 Billion in Nine Months
Unity Bank Plc grew gross earnings by 8 percent despite COVID-19 and other headwinds that hurt the profitability of most businesses in the first nine months of the year.
A break down of the bank’s unaudited financial results for the period showed gross earnings rose by 8 percent to N33.91 billion for the nine months ended September 30, 2020, up from N31.26 billion posted in the same period of last year.
The lender’s total assets rose by 44 percent from N293.05 billion in the corresponding period of 2019 to N420.87 billion in the period under review.
Unity Bank grew profit before tax from N1.61 billion in 2019 to N1.71 billion in the period under review, while profit after tax expanded from N1.48 billion in the corresponding period to N1.57 billion in 2020.
Customers’ deposits stood at N332.36 billion during the period under review, up from N257.69 billion posted in 2019.
Commenting on the performance, Mrs. Tomi Somefun, the Managing Director/Chief Executive Officer, Unity Bank Plc, expressed delight at the strong growth recorded across the bank’s balance sheet, especially from both the liability and assets side of the business and across key indices.
She said, “even as the bank continues to innovate in its e-business product bouquet to target and support value chain business with robust technology and thus diversify its earnings base.”
Somefun said, “One of the areas that will define our strategic direction going forward is investment in alternative channels, leveraging further deployment of resources in technology.
“COVID-19 gave us a chance to test the integrity and scalability of our technology, the IT infrastructure, and the electronic banking channels, and provided us an opportunity to see where we needed to improve and strengthen, knowing that the future of sustainable banking business is in alternative channels.”
Financial Sector Grew by 6.8 Percent in the Third Quarter
The finance and insurance sector that comprises of both the financial institutions and insurance subsectors grew by 5.91 percent year-on-year in nominal terms in the third quarter (Q3).
According to the National Bureau of Statistics (NBS) latest report, the financial institutions’ subsector accounted for 88.89 percent of the sector in real terms in the quarter under review while the insurance subsector contributed the remaining 11.11 percent.
During the third quarter of 2020, the financial institutions’ subsector grew by 6.8 percent in Q3 2020 from 28.41 percent in Q2 2020 and 0.61 percent in Q3 2019 despite COVID-19 and a tough operating environment. The insurance subsector, however, contracted by -18.67 percent in Q3 2020 from -29.53 percent in Q2 2020 and 3.96 percent in Q3 2019.
On a quarterly basis, the sector declined by 24.76 percent.
In terms of contribution to GDP, the finance and insurance sector contributed 2.46 percent in Q3 2020, higher than the 2.40 percent it represented a year ago and lower than the contribution of 3.76 percent achieved in the previous quarter.
The economy contracted by 3.62 percent in the third quarter following a 6.10 percent decline posted in the second quarter. Nigeria is officially in the second economic recession in four years.
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