CBN Inaugurates Committee to Revive Textile Industry

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Godwin Emefiele
CBN Governor, Mr. Godwin Emefiele
  • 50 firms to be revitalised by 2023
  • Loom Money is ponzi scheme, NDIC, SEC warn depositors

Ndubuisi Francis and James Emejo in Abuja

The Central Bank of Nigeria (CBN) has set up a committee for the revival of the country’s cotton, textile and garment industry, with the mandate to revive a minimum of 50 textile firms by 2023.

However, in the short-term, the apex bank plans to revive 20 textile firms within the 2019 fiscal period.

This is coming as the Securities and Exchange Commission (SEC) and the Nigerian Deposit Insurance Corporation (NDIC) have warned depositors against the activities of some online scammers, currently running an online investment scheme tagged ‘Loom Money Nigeria,’ describing the scheme as another Ponzi scheme.

The targets of Loom Money are young people, which the operators lure to participate in a pyramid arrangement.
Citing the whopping $4 billion spent annually on importation of textile materials into the country, the apex bank had in March, added all forms of textile materials to the list of items that are not eligible for foreign exchange from the official windows, thereby restricting the sale of forex to textile importers.

The CBN Governor, Mr. Godwin Emefiele, while inaugurating the committee in Abuja, yesterday, further expressed concern that the country loses $2 billion annually to textile smuggling and export, stressing that it was time the country revived the sector in order to take advantage of the massive opportunities therein.

He said the Textile Revival and Implementation Committee (TRIC), comprising representatives from CBN, five states involved in the production of cotton, federal ministries of power, water resources, finance and Nigeria Customs Service, has the responsibility of resuscitating the country’s cotton belt, identify textile clusters, improve cotton production nationwide and boost power supply to textile firms across the clusters.

The Kano State Governor, Abdullahi Ganduje; Kaduna State Deputy Governor, Bala Barnabas; and Jigawa State Deputy Governor, Ibrahim Hassan, were present at the inauguration.

According to Emefiele, who got the Senate nod for a second term in office yesterday, the committee will further seek to identify infrastructure deficit, especially power supply to the textile clusters; ensure captive power generation is financed and addressed for the textile clusters as well as encourage independent, private off-grid power to ensure 24 hours, seven days a week operations in the clusters.

He said TRIC would also strengthen the Nigerian Customs Service to curb smuggling of textile goods, ensure general reduction of cost of doing business by eliminating multiple taxation as well as ensure zero per cent duty for machineries needed by the textile industry.

The committee will also attempt to retool and re-fit plants and machineries of the textile industry.
The CBN boss also identified counterfeiting, inadequate local patronage, poor high cost of production and multiple taxation as challenges confronting the sector.

He added that the CBN would continue to provide leadership towards the revitalisation of the sector, adding that the bank had already engaged 100,000 cotton farmers to cultivate 100,000 hectares of cotton for the 2019 season.

“I am appealing to all stakeholders to work with us to reclaim our country back and everybody must play a role. We made sure we involved all major stakeholders because no important agency relevant to this has been excluded.

“I am a Nigerian, my children are Nigerians, I feel concern, how do you feel when you go to Kano, foreigners have dominated our markets, selling smuggling textile materials and making a lot of money.

“We must work together to stop this and history will be kind to us as we pursue to reclaim our textile industry.”
All the state governors commended Emefiele for the passion and determination to reposition key sectors of the economy, particularly the textile sector and agriculture in general.

Ganduje particularly hailed Emefiele for encouraging the cultivation of cotton by the farmers, and urged the apex bank to attach importance to the textile value chain in order to guarantee success.
He also stressed that building strong institutions and good management team remained critical to the resuscitation of the sector.

Loom Money is Ponzi Scheme, NDIC, SEC Warn Depositors

Meanwhile, SEC and NDIC have warned depositors against the activities of some online scammers, currently running an online investment scheme tagged ‘Loom Money Nigeria,’ describing the scheme as another Ponzi scheme.

The targets of Loom Money are young people, which the operators lure to participate in a pyramid arrangement.

The acting Director General of the SEC, Ms. Mary Uduk, who warned against falling prey to the scam at a press conference by the Minister of Finance in Abuja, said the fraudsters, carry out their illegitimate activities via social media platforms like Facebook and WhatsApp, luring young Nigerians to invest as low as N1,000 and N13,000 and get as much as eight times the value of the investment within 48 hours.

Uduk, who was represented at the press conference by the acting Executive Commissioner, Operations, of the SEC, Mr. Isyaku Tilde, said the venture is bereft of any tangible business model, describing it as a Ponzi scheme, where returns would be paid from other people’s invested funds.

“We are aware of the activities of an online investment scheme tagged ‘Loom Money Nigeria’. The platform has embarked on an aggressive online media campaign on Facebook and WhatsApp to lure the investing public to participate by joining various Loom WhatsApp groups to invest as low as N1,000 and N13,000 and get as much as eight times the value of the investment in 48 hours.

“Unlike MMM that had a website and the promoter known, the people promoting Loom are not yet known and this pyramid scheme operates through closed groups mainly on Facebook and WhatsApp.

“If it were a local Ponzi scheme with known offices, it would be very easy for the commission to seal their offices and freeze their accounts.

“We, therefore, wish to notify the investing public that the operation of this investment scheme has no tangible business model hence it’s a Ponzi scheme, where returns are paid from other people’s invested sum. Also, its operation is not registered by the commission,” the SEC acting DG said.

She also assured that an inter-agency committee, Financial Services Regulation Coordinating Committee (FSRCC) is working on the issue, while also collaborating with security agencies to shut them down.

Also, NDIC spokesman, Mr. Ibrahim Kudu, has also told THISDAY that anyone who patronises ponzi schemes does that at his or her own risk as the corporation does not recognise any institution not registered by the CBN.

He said: “Last year, CBN and NDIC had reason to issue circular on Ponzi schemes. They are not covered. Anybody who put their money in MMM and all those things, does that at his own risk. NDIC does not insure any financial institution that is not licensed by the Central Bank of Nigeria.

“And so the first question to ask yourself is that is that financial institution licensed by the CBN? No. NDIC has no business with any financial institution that is not licensed by the CBN,” Kudu explained.
A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.

The Loom Pyramid Scheme is not new to the world. Last month, Daily Mail UK reported that the scheme has resurfaced online all over the world, with different names such as ‘loom circle’, ‘fractal mandala’ and ‘blessing loom’.
In Nigeria, its central name is Loom Money Nigeria with individuals creating their own WhatsApp groups such as Jack Loom, and Catherine Loom, among others.