Nigeria: Textile manufacturers worry over lifting of ban
By Stanley Oronsaye with agency report, December 8, 2010, 01:14AM
While President Goodluck Jonathan is justifying the lifting of the ban on textile materials, furniture, toothpicks, and cassava products, the Nigerian Textiles Manufacturers Association has expressed shock at the development.
Executive secretary of the association, Jaiyeola Olarewaju, said without rectifying the anomaly in the operating environment, the move would destroy the sector. He said that the lifting of the ban, when local textiles could not compete with foreign made ones, would lead to complete over running of the local market.
“Stakeholders maintain that the ban should be maintained until the operating environment is conducive, as most industry products cannot compete because of current high cost of production,” Mr. Olarewaju said.
Listing the problems still plaguing the sector, he said that electricity was still not available, the cost of diesel, gas, and LPPO were still prohibitive.
Ban lifting justified
Justifying the lifting of the ban, President Goodluck Jonathan said the move was predicated on the need to discourage smuggling of the products and to benefit from the revenue that would be derived in import duty payments.
“Unpatriotic persons have capitalised on some of the lapses in our enforcement strategies by making use of neighbouring ports to import these items and ship them overland to Nigeria. The result today is that our economy is worse for it, even as we are losing billions each month on duties that ought to have accrued to government,” Mr. Goodluck said on his Facebook wall posting.
According to him, the objective of the ban, which is to stimulate local production, is not being met.
“We are thus losing vital income that could have been directed into critical sectors such as education, health, and critical infrastructure,” Mr. Jonathan said.
However, Mr. Olanrewaju faulted the move, saying that it came at a time when government was providing support to the industries to revamp their operations.
“The government is more concerned about the loss of revenue, but it forgets that lifting the ban when products cannot compete with foreign made ones would only lead to shutting of these industries and would aggravate unemployment situation,” he said.
He wondered how its members would pay back the loans from the Bank of Industry (BoI) if the industries could not be productive because of the new policy.
“It means that the government will take over the factories sooner or later when they cannot meet their obligations to BoI. Government should continue to protect us until the operating environment is right,” he said.