. President Jonathan and the Textile Industry in In the early hours of Thursday, 05 August 2010, I was browsing through Facebook when I chanced upon a comment by the President and Commander in Chief of the Armed Forces, His Excellency, Dr Goodluck Jonathan. As part of his effort to engage with ordinary Nigerians on the net, he was responding to a question by a Nigerian, Imade Ayanru. Please find below the President's comment and my own response to that comment on the same Facebook page: I read your comments and questions, and I want to address the question raised by Imade Ayanru who asked how the government plans to revive the Textile Industry. Well Imade, I have often said that government has no business being in business. It is a misnomer and that is why all over the world Private enterprise tend to do better than government run enterprises. It is however the business of government to provide the enabling environment for business to thrive. As such, you may have read in the media that government has come up with creative ways via legislation and funding to stimulate several sectors of the economy. With the textile industry specifically, we consulted with the Manufacturers Association of Nigeria (MAN), The Nigerian Labour Congress (NLC) and the Textile Workers Union on what they wanted government to do to revive that industry. They were unanimous that their major problem was funding. This administration as a result made 30 billion Naira exclusively available to the textile industry as bail out funds and as you read these words these funds are already being disbursed by The Bank of Industry directly to the end users. I am aware from studies that this industry has the capacity to employ 1% of ------------------- Mr President, Let me first thank you for your response to Imade Ayanru on the matter of what your government is doing to revive the textile industry. However, I want to point out that the strategy adopted by your government has left more questions than answers in relation to an overarching strategy for revival of the manufacturing sector and the economy generally. I particularly note the fact that you call the 30 billion naira doled out to this sector as a "bail out" and here, I would want to limit myself mainly to whether this is money well spent and if so what the nation stands to gain by this effort. Mr President, I perfectly admit that you and your team of economic advisers may have more technical information about this sector by virtue of your positions and easy access to such information; but as a matter of public discussion, especially in a forum like this where you have deemed it wise to engage with us ordinary folks, we can only go by the information you give. No doubt, the textile industry is a huge part of the whole manufacturing sector; but what I do know is that it is controlled principally by foreigners from Be that as it may, in terms of sectors that need funding, I find it curious that priority is being given to the textile industry. Of course, certain other things may be happening in other sectors, but if we aren't told, we certainly will not know. However, if it is in terms of a sector that has capacity for large scale employment with capacity to affect the masses, I would have thought agriculture and/or the informal sector(s) are the natural candidates. Not only do they overwhelmingly employ majority of our own people, this type of money poured into the textile sector is far more likely to help regenerate the economy better if invested there, because of the fact that it is more likely to be targeted at more economic actors than the few in the textile industry. Indeed, when one considers that most of the big textile firms have their main operations and subsidiaries overseas and are far more likely to access international capital if they have the right business profiles and plans, one begins to wonder why Nigerian taxpayers' money is being used to prop them up. I find it a little contradictory that you began your discussion on the issue by saying government has no business being in business, but ended up telling us you gave them 30 billion naira as bail out funds! Sir, the question that naturally arises is on what terms is this money given? If state money is being given for private business controlled by foreigners, what is in it for Nigerians? Are they paying this back? If so, when are they paying it back to the coffers of the state and at what rate of interest? Would this bail out affect the price of textile to the extent that the common man would be able to afford it? Are there conditions for employment of indigenous Nigerians rather than the notorious practice of foreign staffing at the top and middle-level cadres in this industry? Are there provisions made for real professional training of Nigerians or for research and development, especially focusing on local contents? Sir, as you must appreciate, these questions are necessary, because we must be looking at the long-term, rather than just the present. Your duty is not to keep foreigners engaged in capital flight in business in If the idea is to provide an enabling environment for business to thrive as you state and if this has to involve spending state money in this sector, why give them raw cash? Why, for instance, are we not looking to improve raw material production for the industry through investment in cotton production? Since the mid-seventies till date, the domestic cotton output has been falling while more firms have been opening up leading to massive importation of cotton with its negative multiplier effects. Obviously, this affects production cost and ultimately, the Nigerian consumer bears the brunt. The experience of Afcolt Nigeria Limited has indicated that the industry does not have a great idea about cotton-seed contract farming; so, why not invest in the ordinary Nigerian cotton farmers who have the skills and know-how, but who are struggling with financing? Why not invest in infrastructure to aid manufacturing generally? Mr President, I do not wish to bore you here with endless analysis of what I consider as other areas that this money should have been deployed to better aid this sector, but suffice it to say government should have been more open to encouraging this industry to look within to help itself, rather than them being given tax payers' money on terms that are not publicly known. They should be encouraged to diversify more and review their investment strategies. I cannot honestly advise that you should ban the importation of cheap second-hand textile to encourage local industry, because in a situation of runaway inflation and low wages, this has a big social and economic vacuum that it fills. Only a holistic approach to economic regeneration and improvement in standards of living will see to the end of that. Rather, the textile industry in Sir, let me end this by talking honestly and generally about what I feel about your government. You are a man with a great opportunity to change the way Nigerians view government, but I fear that you're a prisoner to vested predatory interests and bad advisers who are too lazy to do their research before advising you on issues. On the night President Yar'Adua passed on, I wrote an article in which I advised you on what I consider as the steps you need to urgently take. Obviously, time has passed and some of my recommendations may now not be implementable anymore as conceived; but I am nonetheless posting a link to that article here (please find it below). I admit that I was not very charitable to you in my assessment of your capabilities, but as I said at the time, I will be the happiest man if you prove me wrong. I believe you are a good man with a good heart; but these qualities are not enough to lead a country as vibrant and historically-burdened as http://www.nigeriavillagesquare.com/articles/kennedy-emetulu/jonathan-paradise-regained.html … |
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