THE Minister of State for Finance, Mr. Remi Babalola recently said that the Federal Government would give the textile industry a N70 billion bailout not in cash but in the form of bank guarantee to enable the sub-sector get back into operation.

Indeed, said the minister, an inter-ministerial group is already in place to bring this idea to fruition. This is too little coming too late. Two years ago, investors in the textile industry called on the Federal Government for help, but they were ignored until one after the other, Nigeria's textile factories closed shop. So why is government just realising the strategic importance of the textile industry? It is however gratifying that government's intention is not specific to textiles alone, but the entire manufacturing sector.

It is most agreeable that there are plans to give the real sector every assistance necessary to enable it operate at maximum capacity and it is trite to enumerate the benefits, economic, social, even political that are derivable therefrom. A 2007 World Bank report ranked Nigeria's manufacturing sector a poor 83rd out of 117 countries surveyed and put capacity utilization at less than 40%.

Later that year, one of Africa's largest textile companies, the Kaduna-based United Nigeria Textile Plc (UNTL) shut down its operations and sent the last 4,000 of its at-a-time 20,000 workers into the job market. The reason that was advanced for this was Nigeria's hostile business environment.

Two years on, we can not with any measure of confidence say that the situation has improved. For example, energy, a critical input into the manufacturing process, has remained in shorter supply than ever, forcing industries to run on generators at exorbitant costs. Many companies have had to shut down due to the rising cost of production, occasioned by such ordeals as the irregular supply of electricity.

The President of the Nigerian Labour Congress (NLC), Comrade Omar comments that 'high cost of energy accounts for the unsustainable cost of operation of most players in the industrial sector'. In 2007, the textile industry lost 67 days to gas scarcity according to the Director-General of Nigerian Textiles Manufacturers, Chief Peter Olanrewaju.

In the 1980s, close to 200 textile companies, including Western Textile Mills, Aba Textiles, Nortex and Gaskiya Textiles, were in active business in this country. At its peak, this sub-sector was the second largest employer of labour after the Federal Civil Service. Today, only a fraction of the textile companies still exists, and they operate with low capacity.

Some, such as Afprint Plc have effectively turned their back on the textile business and gone into edible oil production. The company "is not considering a change of mind" says its chief executive, Mr. Siva Subramanian.

The problems that confront the manufacturing sector are many and multi-faceted. The cost of transporting goods - be they raw materials or finished goods have risen as a result of inadequate and/or poor road and rail infrastructure. Inflow of smuggled, cheaper goods, multiple taxations by federal and state governments, unstable fiscal policies, and Nigerians' penchant for foreign products have conspired to make local manufacturing unprofitable.

In recent years, hundreds of factories have closed shop in the industrial cities of Lagos, Kano, Kaduna and Aba. Tyre manufacturers, Michelin have also closed shop in the face of harsh operating conditions, while some manufacturers are even now, downsizing as part of their response to a worsening environment. Millions, comprising skilled and unskilled workers have joined in the unemployment queue.

The attendant economic, human and social costs are yet to be quantified. But, where there is political will, they are surmountable. If government keeps its promise in respect of its offer to the textile industry, that would indicate a determination to make a difference. But too little is being done too late.

The Manufacturers Association of Nigeria (MAN) has felt constrained , it has now decided to set up a Manufacturers Power Development Company to build for its members an 808MW Independent Power Project at a proposed cost of about N10 billion. This is money that could have gone into modernizing factory machines, upgrading workers' skills, expanding production, and generally spent on the process of producing more and better goods for export.

A few years ago, the United States government under President Bill Clinton enacted the African Growth and Opportunity Act (AGOA) which allowed some African products, including textile goods, free access to the American market. In response to this, the Obasanjo government raised, or so it was claimed, a total of N70 billion specifically for the textile sub sector.

N50 billion was meant to rehabilitate the factories and N20 billion to grow cotton. Disbursement of this huge sum has been shrouded in mystery. We ask: is this same package that Mr. Remi Babalola is representing as new? Nigerians demand an answer.

Indeed, reacting to the latest offer by government, some textile industry operators have merely scoffed. Said one: 'this is not the first time we are hearing the news that funds are to be released to revamp the industry. Two years ago, the government indeed presented cheques to some textile companies to revive their operations but when the cheques were presented for payment, they were not honoured and all attempts to get the fund were frustrated by administrative bottleneck'.

If N70 billion would make some impact a few years ago, it certainly does not go far in the face of the current realities. The value of the naira is much lower now, factory machines are in far worse conditions and the supply of critical production inputs such as black oil are either in short or irregular supply. Like NLC President Comrade Omar correctly observes, a N70 billion bailout for the industry is 'too little relative to the scale of the crisis'.

It is a crying shame that government would wait until the real sector fails beyond redemption before acting. In an earlier editorial, we had noted that, clothing is second only to food in the order of human basic needs. In terms of demand size, we are convinced that producing clothing for a population of 147 million Nigerians, or even a fraction of this number, will directly contribute hugely to the national economy, besides other attendant benefits. Government must take the only right course of action: conclusively ensure that the sector is revived.

All said, even as government attempts what appears to be piecemeal response to the near collapse of the industrial sector, the pertinent question to ask is about the causative factors that led to their present state. We must avoid throwing money at a deep-rooted problem that demands careful analysis and a holistic solution.

So, even with a multi-billion naira bailout, the conditions for survival and improved performance of the textile industry must be created in tandem with financial assistance. To this end, a holistic approach to get all industries working would make better sense. This economy needs to become productive. This is the inevitable path to development, or to achieving the much-touted Vision 20/2020.

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