Nigeria would need a minimum of $1.4 billion (N205 billion) in new investments to revive the textiles sector, a textile consultant, Mr Navdeep Sodhi, has said.
Sodhi, who is the Managing Consultant of Gherzi Sub-Sahara, a textile consulting firm, told the News Agency of Nigeria on Wednesday, in Abuja, that with the new investments, the textile industry would be able to capture at least 40 per cent market share by the year 2015.
"Today, the market share of the industry is only 15 per cent because of the poor state of the sector,'' he said, noting that the key issue for the textile industry was the cost of funds.
If you are looking for the money itself, it is not just there and it is not the correct way to go about it. Today, I can borrow as much as I want from the commercial bank, but why I do not borrow is because the interest rate is so high that my operations may not be viable if I borrow that amount.
"Government's intervention is just to subsidise interest rates or compensate for the interest rate so that cost of fund becomes affordable for the industry so that they can investment,'' he said.
Sodhi urged the government to share the interest rate with investors in the sector. He said that the government did not have to raise the much talked N70 billion but only needed to raise N4 billion to N5 billion, which could easily be made available by the government.
"Even Bank of Industry will have that money. But for the last four years they have been looking after this fictitious fund called textile fund that will never be available,'' he said. He noted, however, that the political will of the government was important as a prerequisite for the industry to move forward.
"Above all, it is the political commitment of the government for the industry to move forward. All other things are very small in nature once you address the big issue,'' he said.
Sodhi suggested that in the short run, the government should provide the operators with soft loans, VAT relief and allowed to import dye with low tariffs. Other recommendations include the need for the Customs authorities, Standards Organisation of Nigeria (SON) to strictly monitor the influx of counterfeit textiles across the borders and removal of tariffs on textile raw materials such as polyester fibre and pigments.
Gherzi, founded in 1929 has some 7,500 projects worldwide in more than 100 African countries. It conducted a comprehensive review of the Cotton, Textile and Garment sector in Nigeria in 2003.
The company has just concluded another study on the sector in collaboration with UNIDO in February. The study will be presented officially to the Federal G