FG urged to save factories while recovering loans

The Federal Government and development finance institutions have been advised to consider restructuring options for struggling textile and cotton factories before liquidating them, in order to safeguard jobs and rebuild Nigeria's industrial sector. Dr Bello Salman, a representative from the Cotton, Textile and Garment Development Forum (CTGDF), made this case in Abuja, highlighting that loan recovery should not jeopardize viable factories and the communities that rely on them.

Salman emphasized that the decline of a factory impacts the entire production chain, from cotton farmers and transporters to factory workers, suppliers, and textile manufacturers. He posited that while institutions like the Bank of Industry (BOI) and other public financial bodies are responsible for recovering public funds, creditors should initially assess whether a distressed factory can be made profitable again.

This viewpoint arises as Nigeria endeavors to revive the cotton, textile, and garment industries. The National Economic Council authorized the creation of a privately-run Cotton, Textile and Garment Development Board under the presidency in April 2025, funded by the textile import levy. Salman proposed an industrial recovery and restructuring framework, which would involve conducting independent evaluations of technically, financially, legally, and market-wise distressed factories prior to liquidation.

These assessments would examine the machinery's state, raw material availability, energy needs, market prospects, debt commitments, and the potential for attracting new investors. Factories deemed viable would be offered debt restructuring, machinery rehabilitation, enhanced governance, additional working capital, and partnerships with strategic investors and experienced operators.

Salman, however, stressed that companies failing the viability test should not receive endless government aid, stating that restructuring must be linked to measurable outcomes. He also advocated for stronger assistance for cotton farmers by providing improved seeds, timely inputs, extension services, mechanization, and guaranteed markets.