By Kazeem Waris
The Federal Government’s drive to recover non-performing loans could undermine its plan to revive Nigeria’s cotton, textile and garment industry if viable factories are liquidated rather than restructured and returned to production, a member of the Cotton, Textile and Garment Development Forum, CTGDF, Dr Bello Salman, has warned.
Salman said government and public financial institutions, including the Bank of Industry, BOI, must balance the recovery of taxpayers’ funds with the need to preserve strategic industrial assets capable of supporting thousands of jobs and reconnecting cotton farmers to reliable markets.
Speaking against the backdrop of moves to recover loans from distressed companies, he said indiscriminate liquidation of factories could destroy the very productive capacity government was seeking to rebuild.
He said: “The Bank of Industry and other public financial institutions have a duty to recover taxpayers’ money, protect their balance sheets and enforce legitimate security.
“But before the machinery of a strategic factory is auctioned or its land is converted to another use, government should ask a larger question: will this action recover the loan, or will it permanently destroy the industry the loan was intended to develop?”
According to him, the distinction is important because Nigeria has already declared an ambition to revive its cotton, textile and garment sector.
He recalled that at its 149th meeting in April 2025, the National Economic Council approved a Presidency-domiciled, private-sector-driven Cotton, Textile and Garment Development Board, to be funded through the textile import levy, with the broader objective of re-industrialisation, community empowerment and restoration of local production.
Salman said the policy ambition must now be matched with a practical strategy capable of keeping viable factories in operation, supporting farmers and rebuilding the industrial value chain.
“The ambition is therefore clear. What Nigeria needs next is a credible path from policy declaration to factory gates reopening, farmers planting with assured offtake and Nigerian-made textiles returning to domestic and export markets,” he said.
He explained that the collapse of one factory could have consequences far beyond the outstanding loan, noting that a closed ginnery could deprive farmers of buyers, transporters of business and seasonal workers of income, while also weakening the raw-material base of textile mills.
“When a spinning or weaving mill is dismantled, the damage travels further: skills disappear, communities weaken, imports rise and an industrial ecosystem that took decades to build is reduced to land, scrap and unpaid debt,” he said.
Salman urged creditors to distinguish between industrial assets that are genuinely beyond recovery and those that could become viable through restructuring, fresh investment, better management and targeted support.
“This does not mean that every distressed company should be saved. Some businesses are no longer commercially viable. Some promoters have failed repeatedly, withheld information or mismanaged public support.
“The objective is to distinguish a distressed but recoverable industrial asset from a fundamentally failed enterprise — and to make that decision through evidence rather than assumption,” he said.
He argued that development finance institutions should maintain their developmental mandate, stressing that strategic productive capacity should not be destroyed before a disciplined recovery assessment is conducted.
“The lesson is not that the government should keep pouring money into inefficient companies. The lesson is that strategic productive capacity should not be destroyed before a disciplined recovery test has been completed,” Salman said.
He added that any extension of support should be tied to measurable improvements in productivity, competitiveness and the ability of the business to operate without indefinite public assistance.
According to him, a factory that is liquidated may repay part of an old loan, but a restructured factory could generate broader economic returns through jobs, taxes, purchases from farmers and suppliers, import substitution and foreign exchange earnings.
“A successfully restructured factory can repay the loan while preserving jobs, paying taxes, buying from farmers, supporting transporters and suppliers, substituting imports and earning foreign exchange for years to come,” he said.
Salman therefore called for a short, lawful preservation period for qualifying distressed industrial assets, followed by a national audit and classification of factories according to their viability.
He proposed that the Federal Government establish a time-bound Industrial Recovery and Restructuring Framework for strategic manufacturing assets, beginning with cotton, ginning and textiles.
Under the framework, he said, factories facing liquidation should undergo independent technical, financial, legal and market assessments before irreversible action is taken.
The assessment, according to him, should determine whether machinery remains serviceable, whether there is adequate supply of cotton or other raw materials, the viability of power costs and markets, the possibility of debt restructuring and whether a credible operator or strategic investor can be brought in.
He said viable companies could receive structured debt rescheduling, realistic repayment periods, justified interest relief, governance changes, technical assistance, machinery rehabilitation, energy-efficiency measures and fresh working capital.
He also urged BOI and other development-finance institutions to actively match viable distressed companies with strategic investors, technical partners and competent operators, while ensuring that existing owners do not automatically retain control where new governance is required.
Salman stressed that recovery efforts must extend beyond factories to farmers and the wider cotton value chain.
“Cotton begins on the farm, and farmers will not expand production without reliable seed, timely inputs, extension support, mechanisation, aggregation, quality control and confidence that a credible buyer will pay them on time,” he said.
“Every factory recovery plan should therefore specify its domestic raw-material requirement, supplier base, quality standards, pricing method and farmer-payment arrangements.”
He said Nigeria’s cotton and textile revival would remain an ambition unless government, creditors and industry could protect recoverable industrial assets and return them to productive use.
“Before another ginnery is stripped, another mill is converted or another community loses the centre of its local economy, we should ask one final question: is this factory truly beyond rescue, or has Nigeria simply not yet assembled the patient finance, better management and strategic partnership required to make it productive again?” Salman asked.
