Interview: Government’s Intervention Has Revived The Textile Sector — Igomu

May 20 07:44 2013 Print This Article

Mr. Ibrahim Igomu

Mr. Ibrahim Igomu is both the National Chairman of the National Textiles Manufacturers Association and the Nigerian Textiles and Garments and Tailoring Employers Association. An MBA holder from the Bayero University Kano, he is also an associate of Personnel Management and a governing council member. Also a member of the joint task force on smuggling on the Standard Organisation of Nigeria and the Nigerian Customs and Excise committees. Mr. Igomu is a business man who has had an endowed banking career traversing UBA, Allied Bank of Nigeria and Ecobank. He also represents the Real sector at the Benue business. In this compelling interview with our correspondent, Benjamin Umuteme, Mr. Igomu spoke on various issues including the fact that Federal Government’s intervention in the sector through the Cotton, Textile and Garment (CTG) fund and the Export Expansion Grant (EEG) has revived the sector.

How has the Nigerian worker fared so far?

If you look at the value chain in the textile industry, we should be talking about, then you talk about 40 percent of the workforce in this country because we have one of the longest value chains that end with the peasant farmer. As you are all aware, the bedrock of the textile industry is the cotton farmer and the cotton farmer depends on the survival of that industry. So you look at the dependency ratio of 0ne farmer to about eight people. W are affecting close to about 17.6million people. The genets, then you talk about the actual textile workers. You see, these are part of the same industry. The farmers produce the cotton, the genets gene the cotton and the factories weave, spin and whatever is intended and the garment industries. I would say it has fared very well with the textile industry because of the timely intervention of government. And I would want to use this opportunity to appreciate the federal government for what it is doing so far in terms of ensuring the revival of not only the textile industry but the entire industrial base of the country. This has contributed to retaining thousands of workers in employment at the same time giving the opportunity to these industries to bring on board more workers. I can comfortably say that say that over the last one year we have witnessed the opening of so many industries in the country-the Ibeshi cement factory in the South West. A couple of textile industries in the Kaduna and Kano opened shop after closing down for some time. We owe this encouragement to government. Government should continue on this positive part through fiscal and micro economic policies. For the textile industries, I want to appreciate the federal government for introducing the Cotton Textile and Garment Fund which it is disbursing to us through the Bank of Industry (BOI). And also the SME Fund from CBN that is also been disbursed through BOI. We thank government for this initiative. And we are still counting on them to continue to introduce initiatives that would address our infrastructure deficiency. We are so far appealing to government that they should continue also in the power sector reform because that itself has marginally reduced the cost of production. The moment you have guaranteed18-hours supply, it means you use less diesel and also access to LPFO which we use to power our boilers. And I want to say Nigerian workers are the most productive workers in the world. They are creative, they are resilient, and they are dynamic and creative. It is an opportunity to celebrate them. The worker is the bedrock of any country and every economy and I believe we have the best set of workers in the whole world.

Despite these achievements, there are still complaints that government is not doing enough?

You see when a worker talks, he talks from the perspective of a worker but as a stakeholder, I should be able to talk from the perspective of an employer. Progress is a continuous progress, it is a journey. The final destination is that you continue producing consistent quality and improving on the quality, so there is no destination. The same thing with Nigerian worker! They are complaining maybe in terms of wages, standard of living, and ability to purchase essential commodity-purchasing power; well it is normal. As a developing economy, these are issues that will continue to thrive but as I have said earlier, the employer and government can only pay you within the reality of its income. Government cannot pay beyond what it can afford neither can the employer in the private sector pay beyond what it is making in terms of profit. So in that instance, I encourage the Nigerian worker that we should also be patriotic and consider ourselves as partners. We witnessed that in Germany, we witnessed that in Greece and in Spain where workers have taken salary cut all to ensure that these factories don’t close down and the government does not go into bankruptcy.

As a stakeholder which area should government concentrate on in terms of improving workers welfare?

I think one of the key areas I would encourage government to address is in the heart of every worker is in the low cost houses, providing low cost houses for the Nigerian worker. Take for instance, Abuja as a federal capital, it is challenging that private developers do not have access to land even when they want to develop mass housing projects. It has become virtually impossible to procure land. So we want a situation where government will step in to make these things easy. Even those that are able to based on the enormous cost of acquiring the land, it is translated to the end users. That is why you notice that so many estates that are built are empty because they are beyond the affordability of the Nigerian worker. Secondly, the issue of infrastructure, transportation to and from their places of work. The Federal Government in partnership with the Local governments and the State governments should come up and evoke a master plan that would provide efficient running public transport systems. We’ve seen the negative challenges we have experienced from the use of “achaba” especially in the far north-vis-à-vis the security challenges.

Considering the Inflationary trend, do you think Nigeria workers need wage increase?

We always say it and I would say it, as long as we centralize minimum wage. The whole aim of legislating on minimum wage is to ensure that nobody goes beyond a particular limit. But there is a tendency in this country that whenever federal government makes a pronouncement, all industrial groupings follow suit. We want a situation whereby the issues of wage negotiation should be decentralized. It would no longer be an issue of federal government has said this, we have to do this. O course, the first question is why is this man saying this? It is actually for the good of the worker. Take for instance, the petroleum sector, the risk factor of a worker in the petroleum industry is much higher especially those in the upstream sector. Then you talk of the ones in the downstream sector. There should be a parameter that would also consider these factors in negotiating their wages. Then you come down to occupations like the Police, Fire Service, Army, they all have their own intricacies. These things need to be decentralized! Government should only negotiate and ensure compliance and monitor. But what we have today is that wages are tied to whatever the federal government is doing. That has crippled or stunted wage negotiation in other sectors of the economy because they would negotiation has to always use government as an excuse. Wage negotiation has to do with the industrial relations of the worker. Government should limit its intervention to fixing minimum wages, health and safety issues at work, labour practices and allow different industrial grouping to negotiate and structure their wages in tune with their own reality.

What is the situation in the textile sector?

In the last three years due entirely to government intervention through the CTG and the EEG, the decline in the sector has been arrested. In the last three years, we witnessed a revival. It is gradually coming out of the situation it was in the last 7 years and we owe this entirely to the intervention of government. The courage of government to come in through the CTG fund not only to inject N100billion but to ensure that it is given at single digit interest rate. I want to use this opportunity to appreciate the management of the bank of industry, CBN, Ministry of Finance and I speak as Chairman of the Association of Textile Manufacturers that as many that applied for that facility as long as you are qualified they were granted. There was no Nigerian factor, there has been no frustration. At the mid-term evaluation that we had with the bank of industry, we even discovered that 90 percent of the CTG fund have been disbursed successfully.

However having said that, with the current security challenge in the far North, a lot of our members in the textile industry are having challenges. Trans-West Africa trade that was hitherto taking place between Niger Republic, Chad, Cameroun and Nigeria is affected. Most of these trans-border traders are afraid to come into Nigeria as such it has affected a lot of our members in the far North. I want to appeal to the federal government to as a matter of urgency look at a situation where this facility can be restricted with a view to also reducing the interest rate possibly to around 2.5-3 percent as against the current 9 percent they are paying.

Can you give a specific figure?

When I say a lot it is basically reference all our members. The Northern market with specific, reference to Katin kwori textile market in Kano is the largest textile market in the whole of West Africa. And this market is fed not only by factories in Kano, factories in Kaduna, Lagos, Onitsha, in the country have depots in Kano. And Nigeria feeds the whole of the West Africa sub-region. And you know the moment you have challenges in Kano, challenges in Borno and Yobe-and you that Kano is very close to our border with Niger Republic. Borno has border with Chad and Cameroun. Then another critical issue affecting textile manufacturers in Nigeria is the issue of smuggling. It has continued unabated, the bringing in of cheap textile articles from the far Eastern countries by unscrupulous business. Standard textile articles in most cases copy Nigerian designs using Nigeria trademarks with the intent to mislead the unsuspecting consumer. If somebody smuggles his own article and tells you it is made by XYZ Company in Nigeria, that person is not paying company tax, he is not paying workers, all he is running s a warehouse and what he gives smugglers. You know already the average Nigerian company is about 60 percent disadvantaged already. At various for a, we have talked about it. We have called on the Federal Government to try to overhaul the activities of the Customs. We also want a situation where the Standard Organisation of Nigeria (SON) would do more than it is doing so far. We must appreciate the fact that under their current Director General they are doing a lot. But we still expect that they do more. When we say more, we mean more prosecution, destruction of confiscated substandard products. When we talk of Customs, you can’t limit your activities to the border. There is a need to trace smuggled items into the market. There is nothing wrong in asking an importer where is the evidence of form M?, tariff payment. These are some of the major challenges we are facing.

Has NTMA made effort to collaborate with regulatory agencies on the issues of smuggling?

Based on our intelligence gathering, it has been established that one of the major industrial hub is Kano through the Katsina-Jibiya border. Having smuggling activities going on at the Katsina border and those items are brought into the market Kano market. We urge the government to come into the market with a view to identifying the kingpins and putting a stop to these activities. Secondly, there is need for the Trademark registry to stand up and begin to enforce Trademarks. Thirdly, there is need for SON to go to market and demand Mancap certificates for products being sold, and if they are imported for sun cap certificates. Essentially what am saying is that Customs, SON need to be proactive. We should borrow a queue from America; borrow a cue from EG countries. These are countries you cannot bring in anything that is bounded, you cannot smuggle because they work together, they are patriotic and they see the fact that if this are left unabated it will eventually affect them as people. One of the common excuses we have from customs is that they have a revenue target. I have said it before and i will say it again custom basically is not set up just to generate revenue. When they keep announcing we have met our revenue target, at the cost of shipping Nigerian jobs abroad? You can actually meet your revenue by collecting money from smugglers but the damage to the economy in the long run. We have billions of unemployed youth, jamb has just conducted its examination, but Nigerian youths wrote that exam and we are told only 500,000 would get admission. What do we do with the rest? It is an emergency. There is a need for government to over head this agencies, this is a need for government to re-orientate personnel of these agencies that the economy and the country is interconnected. What you allow at border will affect your cousin and your child within the country. What you refuse to do in SON, one day it might even be your own child that will use that product. We had the testimony of Dora Akunyili while was she so dynamic in NAFDAC, she said her young sister died after being administered with a fake drug. Do we need to get that point to wake up to our responsibilities? When you sign to do a job, you should do it to the best of your abilities and the fear of God.

How Many People Have Been Gainfully Eempower As A Result Of The Interview?

Since the disbursement of the funds, about 25000 textile workers have been reengaged. Our observation is that the low fund is just one of the problems of the textile industry. Ability to access cheap funds and our   borders are porous, products are being faked and there is security challenge, so you can’t sell it; it’s more like pouring water on sand.

How much is the sector loosing because of the these challenges?

From our conservative estimate, last year we lost N16.8 billion in what would have come into the textile industry as turnover and the federal government lost N3.8 billion in what it would have gained in terms of company taxes. The other tiers of government lost a lot of money because the workers that would have been engaged would pay their taxes. The local government would have benefited further taxes. So you see? When we talk of smuggling, it affects federal government more than even the company because the people smuggling are not paying taxes. Few individuals are collecting what would have come to the government and what they are collecting is a minute part of the value of what is being smuggled.

The involvement of foreigners in retail trade is it right?

This is what is happening in other countries when you have networks of other countries coming in first as an importer later a manufacturer therein being an investor they are now retailers. Questions should be asked if all the value chain in distributive is occupied by a particular group of people, what hope is there for the Nigerian trader. They control manufacturing in their country, it has been suspected that they also control the importations, now they are controlling the distribution. Being a free economy as long as these things are done in line with our laws there is nothing wrong with them but the interest of fairness and competition, it leaves the Nigerian trader at a disadvantage. Having said that, the Chinese controlled a lot of the textile industries in Nigeria. In fact they own some of the largest textile industries in the country. But when you ask the question that you see them retailing, I personally believe that a situation where you have one of the largest textile output as a country and you also have very large textile concerns in Nigeria, the only fair thing to do is to at least allow the distributive aspect of it to the indigenous people to handle.

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