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Can West Africa Lead the Way in Creating a More Sustainable Textiles Industry?

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With textiles and fashion expected to constitute an important post-Covid-19 growth driver for West Africa, stakeholders and key players in the industry are exploring ways to implement sustainable practices and make the sector more environmentally friendly.

While one might not instinctively include it among the world’s heaviest polluters, the textile and fashion industry is a key contributor to climate change, accounting for around 10% of global carbon emissions.

Indeed, with pre-pandemic annual emissions of 1.2bn tonnes, the industry is the second-largest industrial polluter behind the oil and gas industry, surpassing emissions from all international flights and maritime shipping put together.

A major factor behind the industry’s carbon footprint is the water needed for cotton production. For example, it can take an estimated 20,000 litres of water to produce 1 kg of cotton, or one t-shirt and a pair of jeans.

In addition, with up to 8000 chemicals used to turn raw materials into clothes, the World Bank estimates that 20% of global industrial water pollution comes from dyeing and finishing fabrics.

Another major factor behind the environmental footprint of the industry is the sheer mass of clothes produced to meet the needs of modern “fast fashion”. An estimated $500bn in value is lost every year from clothes that are worn for a short period of time and not recycled, with much of it ending up incinerated or in landfill.

Pushing for environmental sustainability

To combat the environmental impact of the textiles and fashion industry, a number of industry players are turning towards more sustainable means of operation.

For example, Jendaya, a UK-based, Africa-focused online fashion retailer avoids plastic and ships goods in recyclable cardboard packaging.

The company is also one of a growing number supportinggin cott designers who produce clothes in smaller capacities on a made-to-order basis, reducing waste and the amount of clothing that is consigned to landfill.

Other examples of African companies promoting local production using natural materials under made-to-order models include Nehanda & Co in Zimbabwe, Naked Ape in South Africa, Nkwo in Nigeria and Awa Meité in Mali.

There are also efforts to support this approach on an institutional level. Fashionomics Africa, an initiative developed by the African Development Bank, aims to develop a sustainable textile value chain and help create business models that will keep garments in use, make use of renewable materials and recycle old clothes into new products.

Another company driving sustainable solutions across the entire value chain in West Africa’s textiles industry is the India-headquartered Arise.

On top of existing industrial projects in Gabon, Mauritania and Côte d’Ivoire, the company is in the process of constructing two textiles parks in Togo and Benin. The sites, which source raw materials, gin cotton, and process and manufacture final products, will emphasise environmental, social and governance (ESG) factors across all aspects of the operation.

For example, some of the sustainability credentials of the textile park in Togo include processing 100% sustainably sourced cotton, under Cotton Made in Africa standards, and using 100% renewable electricity, offsetting 20 tonnes of carbon emissions per day. The site will also reuse 90-95% of the water used during processing and comply with independent international certifications when it comes to dyeing and finishing fabrics.

“The private sector needs to implement socially conscientious governance models across the textile value chain, enfranchising local communities through fair and equitable labour practices while also managing ecological resources sustainably,” Bhavin Vyas, chief ESG officer at Arise, told OBG.

Economic benefits

The benefits of such an approach are not just environmental. Increasing textile production on the continent will also provide an economic boon to the region as countries continue their recoveries from Covid-19.

Indeed, in April the African Circular Economy Alliance, a government-led coalition that promotes environmentally and socially sustainable solutions for economic development, identified the textiles and fashion industry as one of the “Five Big Bets” – alongside food systems, the built environment, electronics and packaging – that could drive the continent’s sustainable development in the future.

The issue is particularly pertinent to West Africa. Around three-quarters of the continent’s cotton is produced in the region; however, most of this is shipped to South and East Asia for processing, meaning that West African countries miss out on much of the value-added economic benefits traditionally associated with the textile industry.

Every year leading West African cotton-producing nations Benin, Burkina-Faso and Mali export 1.8m tonnes of unprocessed cotton worth $922m, but then import $2.4bn in finished cotton textiles and apparels.

In an effort to address the situation, Arise’s textile park in Togo aims to convert 56,000 tonnes of cotton fibres valued at $73m into apparel worth $1.5bn. The company says the construction and running of the site will create 20,000 direct and 80,000 indirect jobs, ensuring that much of the profit will filter into local communities.

Meanwhile, in Benin, where the cotton industry accounts for 12% of GDP and 60% of industrial earnings, the government is playing an active role in promoting domestic production, implementing a ban on 30% of cotton lint exports by the end of 2021, with this figure rising to 70% by 2022 and 100% by 2023.

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.

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NCDMB and NEXIM Sign $30 Million Agreement to Support Oil and Gas Services Firms

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The Nigerian Content Development Monitoring Board (NCDMB) and the Nigerian Export-Import Bank (NEXIM) yesterday signed a $30 million agreement on working capital and capacity building fund to support oil and gas services firms.

Simbi Wabote, Executive Secretary, NCDMB and Managing Director, NEXIM Bank, Abba Bello, signed the funding agreement at the Abuja office of the Nigerian content monitoring agency.

Wabote said the Oil Producers Trade Section, Independent Petroleum Producers Group and Petroleum Technology Association of Nigeria had raised concerns over funding challenges confronting oil services firms, as this had made most of the companies to consider downsizing their staff.

He said, “The OPTS and IPPG had at some point raised before the NCDMB the inability of most indigenous contractors to provide services to them due to challenges of funding.

“This was especially when we got struck by the COVID-19 pandemic. I recall receiving several letters particularly from IPPG trying to see how we can support this.”

He added, “I also recall receiving similar letters from PETAN when the COVID-19 struck and most of their members had nothing to do anymore.

“This is because companies were shut down and their members were threatening on how to downsize and take Nigerians off their payrolls.

“Based on this, we then set up a committee to say how do we support these firms with the provision of working capital.”

Wabote noted the roll-out date for the fund would be July 1, 2021 and that the fund size of $30m would be boosted by matching funds of the same amount to be provided by NEXIM in naira (to be converted at prevailing official exchange rate).

“The scheme shall cover loans for working capital support and capacity building, oil service contracts, invoice discounting including acquisition of low-end equipment to service short-term contracts/service obligations,” he stated.

He said the target market comprised Nigerian oil service providers which belonged to a professional association in the Nigerian oil and gas industry and commercially viable with a business relationship with either an international oil company or a major Nigerian oil firm.

“Maximum amount that can be borrowed by a single obligor is $1m or its naira equivalent at the official exchange rate prevailing at the time of borrowing,” Wabote said.

He added, “Tenor shall be up to 12 months for working capital loans and up to three years for capacity building loans with moratorium of up to 12 months.

“The applicable interest rate shall be five per cent per annum all-in for dollar-denominated loans and eight per cent all-in per annum for naira-denominated loans and the rate shall be fixed throughout the tenor of the loan.”

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LivingTrust Mortgage Bank Appoints Mr. Timothy Olorunsogo Gbadeyan as Company’s Secretary

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LivingTrust Mortgage bank has appointed Mr. Timothy Olorunsogo Gbadeyan as company secretary/head of legal services.

The bank disclosed in a statement signed by Ikechukwu Omuku, the Finance Officer/Head, Investor Relations, LivingTrust Mortgage Bank Plc.

The statement reads “We wish to notify The Nigerian Stock Exchange and the investing public of the appointment Mr. Timothy Olorunsogo Gbadeyan as Company Secretary/Head, Legal Services of LivingTrust Mortgage Bank Plc.

“Mr. Gbadeyan is a consummate corporate attorney with experiential background in deals advisory, real estate finance, facioring, general commercial transactions, corporate governance, company secretarial services and regulatory compliance. Until his appointment, he was the Head of Legal Services of Infinity Trust Mortgage Bank Plc.”

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Farmforte, Others Signs MoU To Strengthen and Sustain Growth in Agricultural Sector

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Farmforte Limited has signed a strategic Memorandum of Understanding with the Agricultural Fresh Produce Growers and Exporters Association of Nigeria; HYBR, a pan-African innovation firm; and ALTS, a consulting and strategy development firm.

The firm said in a statement on Sunday that the partnership would strengthen common interest cooperation and stimulate inclusive and sustainable growth within the agricultural sector, by capitalising on the synergy and comparative advantage offered by each organisation.

Speaking during the signing ceremony, Farmforte Co-Chief Executive Officer, Osazuwa Osayi, said, “Our mid to long-term strategic goals are further reaffirmed, as this partnership will facilitate the sharing of knowledge, ideas, and expertise across the agricultural sector.

“We will collectively address initiatives and approaches concerning agricultural investments, food security, and the overall robustness of the value chain.”

He said the collaboration would also unlock the full potential of the sector and place it on a renewed path for success, especially within a post-pandemic economy.

The President of AFGEAN, Tajuddeen Dantata, said, “By creating dialogue and fostering investment in the horticulture sector, this partnership will endeavor to support Farmforte in its exporting efforts by improving operational efficacy and cost-savings, while ultimately driving socio-economic growth in the country.”

The Chief Executive Officer, HYBR, Charles Ojei, said to drive inclusion, sustainability, job creation, and Nigeria’s overall economic growth, the optimisation of the agriculture value chain was critical.

“This collaboration is a fusion of the complementary capabilities of all partners to move a bigger agenda forward.”

The Managing Partner, ALTS, Akintunde Sawyerr, said, “The goal of this partnership is to support Farmforte’s vision of becoming the largest agribusiness by 2035 via scalable and world-class innovation across its enterprise.”

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