NAN-H-84
Funds
By Funmilayo Adeyemi/Bukola Adewumi
Abuja, Dec. 20, 2016 (NAN) Mr Issa Aremu, the General-Secretary, National Union of Textile Garment and Tailoring Workers of Nigeria (NUTGTWN) has lauded the Federal Government for increasing intervention funds in 2017.
Aremu, who made the commendation when he featured on the News Agency of Nigeria (NAN) Forum in Abuja, also called for intervention in the textile industry to enable it actualise its mandate.
He said that financing had been the major hindrance to the revival of the industry adding that more intervention funds would help in this area.
Cue in audio 1 (Aremu on intervention funds)
“We’ve listed some of the factors that undermine textile production – electricity, smuggling, lack of patronage.
“Of course financing is also part of the problem. And Financing is not that we don’t have commercial banks we have them in large numbers but you know the cost of funding and even the tenure of funding.
“That’s what makes those sources of funding not attractive. Now In this way intervention funds come in.
“Intervention funds you’ve mentioned N70 billion, I think they later raised it to N100 billion and recently CBN have added additional N50 billion naira.
“Now this intervention fund is not free fund, it’s not a grant, it’s a loan, the attraction of it is that its long term we are not to repay it tomorrow or next week.
“It has to be repaid in 10 years time and then the cost of refund is cheaper. What I mean here is single interest rate, in fact 5 to 6 per cent driven by Bank of Industry.’’
Cue out audio 1
Aremu commended the Bank of Industry (BOI) and the Central Bank of Nigeria (CBN) for their roles in stabilising the survived textile industries in the country.
He said that the intervention funds had helped a lot in settling some of the debt incurred by some of the country’s textile industries while also helping to revive others.
Cue in audio 2 (Aremu on intervention funds)
“Bank of Industry has been very instrumental in stabilizing the few factories that are being in existence right now.
“UNTL (United Nigeria Textile Plc.) actually close down in 2007 but it got revived in 2010 and it was this intervention fund that helped for that revival.
“And what did they use the funds for; they need to do some payment for some of their cost of operations.
“And because it is relatively cheaper fund, it frees them resources compared to if they had borrowed from commercial banks.
“In fact, part of the intervention funds they use it to pay some debt from commercial banks so that intervention funds have been very critical.
“But you will agree with me that this is the same country CBN spent about close to N4 trillion to bail out six banks.
“Now we are talking about 150 textile mills that have closed down, you are given 70 billion token, 100 billion and now we have 150 billion.
“I think we are not ambitious as a nation to revive industries. We need trillions of naira to really get industries moving. Even the budget of Nigeria for 2017 is very commendable.’’
Cue out audio 2
He, however, said that to get out of the present recession of the country, there was the need to increase public spending.
He added that with the increase in the 2017 budget, it was still not enough to soften the pains and lack of the citizenry.
“I want to commend President Buhari for having some ambition raising the budget.
“The first time we had N6.6 trillion budget. That’s the highest, now it has been raised to N7.2 trillion.
“To get out of recession there must be big time public spending. Even at this, this money is too small for a nation of 180 million people.
“I did the analysis for 2016 budget, at N6.6 trillion, we divided it, but it was difficult because of the exchange rate and the budget per capital came to about 50 dollars per anum for each citizen.’’ (NAN)
FAK/BOL/DOR/YEE
Edited by Nyisom Dore/Emmanuel Yashim
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