Latest posts
Home / Nigeria News / FG to wthdraw incentives for cotton export

FG to wthdraw incentives for cotton export

The Federal Government is considering the possibility of withdrawing the Export Expansion Grant (EEG) granted for the export of ginned cotton.

the vice president, Mohammed Namadi Sambo, said this yesterday during a briefing session with the management of United Nigeria Textile Plc (UNT Plc) in the State House, Abuja.

He also observed the need to hold a meeting with the nineteen northern state governors to prepare for next year’s cotton production, to enable it embark on a sensitisation campaign to boost large scale cotton production during next year’s farming season.

“In order to satisfy the need of our local consumption, so that our local industries can get adequate cotton lint for the running of their local production, we shall temporarily withdraw the Export Expansion Grant from November 2010 – 2011,” he said.

As an immediate relief measure, the government will hold talks with the Petroleum Product Pricing Regulatory Agency (PPPRA), and the Nigeria National Petroleum Corporation (NNPC) with a view to lowering the price of LPFO to between N25 – N30 per litre and reduce the cost of doing business in Nigeria.

Mr. Sambo also noted the need for duties waiver on Cotton, Textile and Government (CTG) to which a Letter of Credit has been granted.

Plenty yet scarce

He promised to pay a visit to United Nigeria Textile Limited, Kaduna, in the first week of December, to see the progress of work so far.

The executive director of the company, P.M. Chun, briefed the vice president on the progress being made in Kaduna, stating that weaving operations had commenced with 180 weaving looms, and they had recruited about 387 old staff.

He noted that the short supply of cotton constitutes a problem affecting textiles industries in Nigeria. Mr. Chung said the market for cotton “is very confusing and cotton sellers are inconsistent, preferring to export or in the alternative, arbitrarily increase price of the commodity at will.”

He also frowned at the activities of speculators who mop up the local supply because of increase in margin. He asked government to suspend the export of cotton for between two to three months as a precautionary measure, stating that local production is as high as 60,000 tonnes while local demand stood at 20,000 tonnes, yet cotton is still scarce.