he textile industry in Nigeria did not collapse because the companies did not have loans but because they didn't have power, caustic soda was too expensive, Nigeria signed an international agreement, and opened the country's doors to cheap Chinese imports that ran them out of business.
This was the assertion of the Governor of Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi while responding to reactions at a policy dialogue on the theme " post-consolidation crisis in the banking sector: the challenge of regulation going forward," held at the Nigerian Institute of International Affairs Lagos.
Contrary to the view held by some analysts that the sector collapsed because of lack of access to credit, Sanusi said it has nothing to do with loans and the banks.
"In fact the banks suffered. The textile industry is the other way round. It is not that the textiles closed down because the banks were not lending. The reality is that they folded up because they had lent to textile industry and the industry itself, collapsed under the weight of bad government policy, " he stated.
Manufacturers according to him, need money, they need power, they need infrastructure and a tariff regime that supports them. Even when the manufacturing company is going on, the margin has to be considered, as well as the interest rate they are able to pay.
Only recently, the National President of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dr. Simon Okolo, underscored the fact that money alone is not the problem faced by the industry when he spoke on the N100bn revival fund proposed by the government to salvage the textile industry. He said even when the money is eventually given for purchase of equipment and others, it would take six months before the banks would process all the documents, and another three months to go about processing the clearing of cargoes at the ports. Noting that the port charges among other unexpected costs that were not budgeted for would also surface along with the interest that would be paid on the money. These according to him , would make it difficult for the money to be paid back. As a result of that, he recommended for a trust fund to finance the sector.