•Tinubu
The federal government and development finance institutions have been urged to explore restructuring options for distressed textile and cotton factories before resorting to liquidation, to preserve jobs and rebuild Nigeria’s industrial base.
A member of the Cotton, Textile and Garment Development Forum (CTGDF), Dr Bello Salman, made the call in Abuja, stressing that recovering loans should not come at the expense of viable factories and the communities that depend on them.
Salman said the collapse of a factory affects the entire production chain, from cotton farmers and transporters to factory workers, suppliers and textile manufacturers, reports Weekend Trust.
He said although the Bank of Industry (BOI) and other public financial institutions had a responsibility to recover public funds, creditors should first determine whether a distressed factory could return to profitable production.
According to him, the forced sale of specialised machinery and industrial land may provide short-term loan recovery but could permanently destroy assets needed for Nigeria’s planned industrial revival.
His position comes as the country seeks to revive the cotton, textile and garment sector. The National Economic Council approved the establishment of a Presidency-domiciled, private-sector-driven Cotton, Textile and Garment Development Board in April 2025, with funding expected from the textile import levy.
Salman said the initiative should focus on rebuilding an integrated value chain in which farmers supply ginneries, ginneries supply textile mills, and manufacturers produce for both domestic and export markets.
He proposed an industrial recovery and restructuring framework under which strategic distressed factories would undergo independent technical, financial, legal and market assessments before liquidation.
The assessments, he said, should establish the condition of machinery, availability of raw materials, energy requirements, market opportunities, debt obligations and the possibility of attracting new investors.
For factories found to be viable, Salman recommended debt restructuring, machinery rehabilitation, improved governance, fresh working capital and partnerships with strategic investors and experienced operators.
He, however, said companies that failed the viability test should not receive indefinite government support, adding that restructuring must be tied to measurable performance.
He also called for stronger support for cotton farmers through improved seeds, timely inputs, extension services, mechanisation and guaranteed markets.
