The Deputy Managing Director (DMD), Kewalram/Chanrai Group of Companies, Victor Eburojalo, has blamed the Federal Government for the collapse of the textile sector, insisting governments have no reason doing business.
Eburojalo, a former President and Chairman of Council, Chartered Institute of Personnel Management of Nigeria, maintained that publicly owned enterprises should be privatized and with no room for monopoly.
While speaking on how Kewalram/Chanrai Group had been coping with the harsh business environment in the country, Eburojalo said that things have been very tough.
“It has been a very tough time for us in the manufacturing sector. So, planning becomes very difficult. We have had to downgrade our forecasts.
“We scaled everything down during depression, so, when things started to pick up, we were not caught unaware. It wasn’t a sudden decision. Running a business has to be done in a businesslike manner. We saw it coming and we prepared for it.
According to Eburajolo, things have been terrible for manufacturers, generally, despite the fact that the country has crawled out of recession.
“For some time now, it has been tough for manufactures. This is because the country is heavily import-reliant. Everything we produce has a lot of foreign input. During this period, it was quite difficult coupled with the depreciation of the Naira. If you have to adjust your prices, there is a limit to which you can do. So, most companies have been contended with breaking even and hoping for better days in the future,” he said.
He noted that most companies are unable to pay dividends and some out of tradition, are bending backwards just to satisfy their shareholders by paying some interim dividends.
“Nigerians are hard working but what leaders are sending today to the youths is that there is nothing like hard work”.
To make workers more comfortable, he said his company was giving out 10kg of rice for those in the lower cadre as a way to empower them.
“That went a long way to boost productivity. So, it was better for us to make the sacrifice,” he said.
He also said that despite the harsh economic realities, his company did not reduce its staff strength. “Those who were due to retire were asked to go and all their benefits paid and then some of them who were still considered strong, after retirement, were brought back on contract for service, which is renewable every year.”
He further said that owing to his position as the group’s deputy managing director of a firm that was into textile milling, he is aware of the changes that have taken place in the industry and how they have impacted the sector.
He blamed the decline of the textile industry on the hasty decision by Nigeria to ratify the World Trade Organisation (WTO) treaty in 1995.
“At the peak of textile milling in the country, the companies went into backwards integration and we had over one million people employed, whether directly or not. For Afprint, there were about 12,000 farmers in the Northeast producing cotton. Today, there are not more than four surviving textile mills.
“Government caused everything. We couldn’t compete with the Asian market and we just opened ourselves for the result that we got. Under these agreements, the textile industry was brought into full compliance with the General Agreement on Tariffs and Trade (GATT) rules, and all quota restrictions were rolled back by January 1, 2005.
“In accordance with WTO rules, Nigeria had to remove any protection of the local textile industry. It would have been better for the country to secure special arrangements with the WTO, such that the local textile industry would be protected until it was surer on its feet,” he said.
Eburajolo added that Nigeria was not prepared when it government signed the deal.
“The textile industry protested, but we couldn’t do anything about it. Government did not consult with stakeholders. If you can’t compete, you run at a lost. During this period of misfortunes and eventual collapses of the industry, we moved into other things,” the Kewalram/Chanrai boss said.
Eburojalo argued that what has contributed greatly to the decline is policy somersault, which is a stock in trade of Africa.
“In fact, in Ghana, the operators of the Akosombo Mill had to shut it down. I remember a statement made by an expatriate director when the company was being closed down. Who says the Ghana Company will not be doing better than Nigeria’s in the future? When the future is better we would come back. Today, the place is working again.”