- Manufacturers Hope on Nigeria-China Currency Swap to Reduce Costs
Manufacturers have expressed the hope that the proposed currency swap between Nigeria and China will go a long way in reducing their cost of doing business.
Specifically, textile manufacturers are optimistic that importing raw materials from China with the Chinese Yuan instead of the dollars would cut cost by over 50 per cent.
Expressing this optimism to our correspondent in a telephone interview on Wednesday, a leading textile manufacturer and Chairman, Gas Users Group, Manufacturers Association of Nigeria, Dr. Michael Adebayo, said that the currency swap might be one of the best decisions that the government had taken that would be of benefit to the manufacturing sector.
Adebayo, who is the Deputy Director, Haffar Industries Limited, said that the major raw material for making fibre and yarn was imported from China and this constituted up to 50 per cent of the cost of production.
He commended the government for its efforts geared towards relieving the cost burden on textile manufacturers, noting that the government had equally intervened in the issue of gas with the aim of making it affordable for practitioners.
Earlier, the manufacturers complained about the cost of gas and the fact that Nigerians were paying for gas in dollar instead of the local currency.
Adebayo said that the government was working to resolve the situation and possibly reduce the gas price for the textile manufacturing sector.
The Director-General, Nigerian Textile Manufacturers Association, Mr. Hamman Kwajafa, agreed that the currency swap held a lot of hope for reducing cost of production. Imports from China would be cheaper, he said.
He however regretted that the industry still had the problem of lack of patronage.
According to him, the implementation of the procurement law that directs agencies of government to patronise local textile manufacturers in the purchase of materials for making uniforms is not effective.
“We are not seeing patronage from government agencies,” he said, adding that to compound this situation, the influx of cheap textiles from Asia had made it difficult for operators to compete.
On his part, the Managing Director, Woollen & Synthetic Industries Limited, Mr. P.K Pal, said that the firm had been enjoying patronage from government agencies, albeit not on a regular basis.
He said the volume of product purchased was not significant, adding, “One can hardly survive on local patronage.”
