ANNOUNCED AS TEMPORARYNo
Interest payment subsidy
The federal government of Nigeria has approved a 10 billion naira fund to assist textile and cotton manufacturers in the country. The fund is part of a 100 billion naira bond-funded cotton, textiles and garment industries revival scheme launched on 18 December 2009. Beneficiaries of the fund include farmers producing cotton and other fibre products, spinning and textiles millers and ginnery operators. The fund is to be disbursed as loans with a 6% interest rate and other conditionalities. The Bank of Industry is charged with disbursing and managing the fund.
The interest rate charged on these loans is a fraction of the rate charged on commercial loans (reports in 2009 referred to commercial loan rates of 20-32 percent.) These loans will either revive moribund plants or discourage exit by existing plants, both of which raise supply and depress prices, to the disadvantage of foreign suppliers (whether they own facilities in Nigeria or import from abroad.)
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