Business

Textile manufacturers oppose incentives given to foreign investors, say it will kill the industry

The Nigerian Textile Manufacturers Association (NTMA) has kicked against some incentives given to foreign investors in the country,

The body noted that the incentives would do a lot of damage to local manufacturers.

In order not to fizzle local textile manufacturers out of business, the association appealed to Federal Government to review some of the incentives

It said that what the Federal Government needs to do is to promote the growth of local manufacturers and boost the country’s GDP.

The Director-General of NTMA, Hamma Kwajaffa, lamented that some of the incentives set to attract Foreign Direct Investments (FDIs) pose a threat to the business, local textile manufacturers.

Speaking with journalists in Lagos, Kwajaffa decried the proposal that operators, who invest a minimum of 10 million dollars in local cotton and textile garment industry and employ 500 direct Nigerian staff, can import fabrics worth 50 per cent of their operation levy free for a period of five years.

“We textile manufacturers in the country have set a target to boost our production and also a 100 per cent off-take of locally produced raw cotton,” he said.

He lamented what would happen to the cotton produced by the local manufacturers, saying, ‘will the farmers wait for you for these five years?’

“With the proposed policy, that means you are discouraging cotton production and invariably the value addition to the textile industry.

“Afterall, there are investors in the country with more than one billion dollars investment such as Sunflag Ltd., UNTL Ltd., which have above that in the textile industry.

“The investors that are being encouraged to come in with finished fabrics would kill local manufacturers and hinder our quest to attain global competitiveness.

“If new investors are allowed to import fabrics duty free and VAT free, it will infringe on the planned 1.7 billion metres of finished fabric sector target programme for the textile industry,” he said.

Kwajaffa noted that fabric importation by would-be investors would collapse cotton farming,

He advised the government to pursue its drive for foreign investment in a way that would not affect local investors’ competitiveness, employment, wealth creation and industrial growth.

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