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Textile Industry: NECA, Textile Union Back CBN on Forex Restriction

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  • Textile Industry: NECA, Textile Union Back CBN on Forex Restriction

The Nigeria Employers’ Consultative Association and the Senior Staff Association of Textile have expressed their support for the Central Bank of Nigeria’s recent restriction of forex to textile importers.

The CBN Governor, Mr Godwin Emefiele, had on Monday said the recent measures announced by the apex bank were to revive the Cotton, Garment and Textile sector. He said the measures were well thought out to reposition the sector for job creation and economic growth.

Emefiele was replying to the position of the Lagos Chamber of Commerce and Industry cautioning government over the restriction of foreign exchange for the importation of textile materials.

The LCCI Director-General, Muda Yusuf, had said that there was a need for a strategic approach before such policy pronouncement should have been made.

He had advised the Federal Government to reconsider the Central Bank of Nigeria’s ban of forex to textile importers.

He argued that given the position of Nigeria in Africa as a leader in fashion, the range of fabrics produced by the Nigerian textile industry could not support the industry in terms of the quantity and quality.

Yusuf, who noted that his submission was not to diminish the importance of the local textile industry in any way or the significance of the nation’s industrialisation, however, added that this was to underscore the importance of a strategic approach to industrialisation.

The LCCI DG said before such policy pronouncement, the government ought to have strengthened the capacity of domestic industries, enhanced their competitiveness and reduced their import dependence as espoused in the Nigeria Industrial Revolution Plan.

But reacting to the position of the chamber, the CBN governor said the strategic approach being referred to by Yusuf had never worked.

Speaking in support of the CBN governor on Tuesday, the Director-General, NECA, Mr Timothy Olawale, and the General Secretary, Senior Staff Association of Textile, Mr Foly Owolabi, in separate interviews with our correspondent, described the forex restriction on textile imports as the right step in the right direction.

They added that the revitalisation of the Nigerian textile industry, which used to be the largest employer of labour after the civil service, would stimulate local production and create employment opportunities for Nigerians, given the rate of unemployment in the country.

Olawale said NECA had been clamouring for the strengthening of the local industries, and the CBN had hit the bull’s eye by the action, arguing that the measures would lead to the resuscitation of the moribund textile industries scattered across Lagos, Kaduna, and Kano, among others.

He, however, called on the government to take a decisive action on the nation’s epileptic electricity, and other infrastructure that would aid industrialisation and take the textile industry out of the woods.

He said, “One has to understand the CBN’s position in order to appreciate the restriction it placed on forex for textile imports. At the Nigeria Employers’ Consultative Association, we have been clamouring for the strengthening of the local manufacturing.

“We are totally in support of the CBN for the restriction of forex for textile imports. Essentially, the CBN’s measures would lead to the resuscitation of the nation’s moribund textile industry, it would make them competitive and lead to the provision of employment for Nigerians.

“As employers, we have many employers involved in the textile importation. The government is not saying it has banned importation of textiles. What the government is saying is that it will no longer offer forex to the importers of textiles. So, they will have to source their forex through others sources.

“To really boost local production, the government must take a decisive action on the issue of electricity. It must ensure that the power generated are all distributed to the consumers. It must settle the acrimony between the Gencos and Discos and the regulators.”

On his own part, Owolabi said he was excited about the fact that the CBN had also announced that it would give loans to the operators at a single digit rate, to enable them to retool and remodel their machinery.

He noted that those textile companies that were still in existence currently operated below 20 per cent capacity, but with the CBN’s intervention, he hoped to see them moved up to between 70 and 80 per cent capacity.

He said, “The restriction of forex to textile importers by the CBN will boost the local textile industry, in terms of increase in production capacity. Currently, they are operating below 20 per cent; I am hopeful that after the CBN’s intervention in providing the loans, their production capacity will move up to between 70 and 80 per cent.”

Owolabi rued the LCCI which had complained about the issue of epileptic power sector, arguing that “electricity is a work in progress.”

The Ogun State Chairman, Trade Union Congress, Olubunmi Fajobi, however, expressed his fears about the issue of power and the inability of the local textile industry to meet the local demand in terms of quality and quantity.

He said, “Let us use the local Adire as an example, some of the fabrics being used for its production are imported from Republic of Niger and Mali, among others. Can we cope with the local demand? Do we have electricity? Are the production lines running at full capacity?

“We must address all these deficits, before taking measures that will have far reaching effects on Nigerians, an industry or a sector of the economy.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

France, Nigeria to Build New Partnership

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France is currently aiming at building a new partnership with Nigeria, with the dispatching of its Minister in charge of Foreign Trade and Attractiveness, Franck Riester, to Nigeria.

Riester, who was expected at the time of filing this report on Monday, is scheduled to visit Nigeria from 12-14 April, 2021.

A statement from the French Embassy in Nigeria said: “Franck Riester is visiting Nigeria from 12 to 14 April, a visit that follows up on the priorities set by French President Emmanuel Macron during his official visit to Nigeria in July 2018 and his desire to build a new partnership between Africa and France.

“As the largest economy in Africa and the economic engine of West Africa, Nigeria is indeed a major partner for France, the first in sub-Saharan Africa with bilateral trade amounting to a total of 4.5 billion USD in 2019 (2.3 billion USD in 2020, due to the Covid-19 pandemic).”

It disclosed that the minister will have several official meetings in Abuja and Lagos, in order to underline the importance of the bilateral economic relationship and to prepare the summit on the financing of African economies in Paris on 18 May.

It revealed that the objective of the mission is also to further strengthen the links between the French and Nigerian private sectors, and “in this regard, the minister will have in-depth discussions with the main Nigerian economic actors to strengthen bilateral cooperation and investments, both in Nigeria and in France, particularly in the logistics sector”.

It said while in the country, the minister would meet with young Nigerian entrepreneurs in the cultural and creative industries sector, to discuss the major role of their country in African creativity and the development of the African entrepreneurial ecosystem, with the support of France.

It further said: “The minister will also open the ‘Choose Africa’ conference, a €3.5 billion initiative by President Emmanuel Macron dedicated to supporting the development of start-ups and SMEs in Africa to enable the continent to benefit fully from the opportunities of the digital revolution.”

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Economy

COVID-19: USAID to Provide $3m Grant, Technical Assistance to Combat Food Insecurity in Nigeria

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The United States Agency for International Development (USAID) is providing financial grant and technical assistance worth $3 million to combat food insecurity in Nigeria compounded by COVID-19 pandemic.

A statement by the agency on Monday said: “On April 12, 2021, the U.S. Agency for International Development (USAID) in Nigeria launched a COVID-19 Food Security Challenge that will provide $3 million in grant funding and technical assistance to youth-led and mid-stage companies working in food value chains in Nigeria.”

The statement lamented that Nigeria is experiencing food insecurity compounded by the COVID-19 global pandemic and its effects on the food value chain in the country.

It stated that the pandemic has disrupted the already fragile agricultural value chains, especially smallholder farmers’ ability to produce, process and distribute food, which has disrupted agricultural productivity and markets, and negatively impacted livelihoods, especially among vulnerable households, women and youth.

The USAID Mission Director, Anne Patterson, said: “We are launching the COVID-19 Food Security Challenge to help innovative Nigerians alleviate food insecurity.

“This assistance encourages private sector-led solutions to boost food production, processing and create market linkage along the agriculture value chain in a sustainable way across Nigeria.”

The statement revealed that in launching the challenge, USAID seeks commercially viable youth-led and mid-stage companies already working in food production, processing, and distribution, noting that successful applicants will present ideas that demonstrably help farmers and other stakeholders in the agricultural value chain increase, agricultural productivity and food security within the next six months.

According to the statement, the challenge will award 15 to 25 youth-led companies up to $75,000 each and award 10 to 15 mid-stage companies up to $150,000 each.

Winners will receive funding and technical assistance to rapidly expand their activities to mitigate the effect of COVID-19 on Nigeria’s food value chain and improve the resilience of vulnerable households to the negative impacts of the pandemic.

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Economy

FG Plans to Deliver Solar Energy to 25M Nigerians

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The Nigerian federal government has commenced its plan to deliver electricity through solar energy to Nigerians whose communities are off the national power grid.

Vice President Yemi Osinbajo, who spoke during an event to mark the programme in Jangefe, Roni Local Government Area of Jigawa State, restated the determination of the President Muhammadu Buhari administration to give more Nigerians access to cheap and environmentally friendly renewable power.

Osinbajo said the Solar Power Naija programme would continue across the six geopolitical zones in six states, namely, Edo, Lagos, Adamawa, Anambra, Kebbi and Plateau, in the first phase, and then move to the entire 36 states and the nation’s capital, thus, covering 25 million Nigerians at completion.

Jangefe community got 1,000 solar home system connections for its about 5,000 population, as part of a 100,000 scheme, with a local solar power company implementing aspects of the scheme.

According to Osinbajo, the president had emphasised that Nigeria could no longer rely solely on the grid if government is to electrify the whole country, which meant that an effective strategy had to be developed for decentralising power supply.

The Solar Power Naija programme, which is designed by the Rural Electrification Agency (REA), is an ambitious initiative that aims to create five million connections through a N140 billion financing programme that will support private developers to provide power for five million households, which means providing electricity for up to 25 million Nigerians.

The vice president disclosed that the programme was a Public Private Partnership (PPP) arrangement supported by concessionary lending via the Central Bank of Nigeria (CBN) and commercial banks. He emphasised that structures had been put in place to make the cost of the connections affordable for the target communities.

In addition to the concessionary lending rates, Osinbajo explained that the government had provided subsidies and rebates for private developers to the tune of over $200 million under the REA and World Bank Nigeria electrification programme.

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