Extend loan repayment tenure by one more year: BGMEA

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Thursday reiterated its demand for extending the stimulus package loan repayment tenure by additional one year.
BGMEA president Dr Rubana Huq, in an open letter said, "Without the moratorium on the salary stimulus package being extended by six more months or the tenure of the loan being extended by at least one more year, the industry will collapse."
Ms Huq's open letter came after the central bank on January 03 instructed all the commercial banks to arrange loan repayment of the stimulus package starting by the third week of this month.
To offset the impact of the Covid-19, the RMG industry received Tk 105 billion from the government as package to pay its workers four months of wages beginning from April last.
The cash already disbursed requires the factories to clear their debt in 18 equal instalments within two years with a grace period of six months.
This is one of the most tragic turns in the local readymade garment (RMG) industry, the BGMEA president said.
She added: "In the absence of proper restructuring or even an exit policy, shrouded by western bankruptcies, hounded by buyers' unforgiving contracts and force majeure clauses, the factories are facing turbulent times."
Perception of the industry doing well and getting all the favours from the government must kindly be reassessed today. Otherwise jobs of 4.1 million workers will be at stake.
Explaining the reality, she said, the industry is taking a deep plunge into uncertainty amid the second wave of Covid-19.
Citing the Export Promotion Bureau (EPB) data, she said December'20 data continued to portray the worrisome scenario of local RMG exports.
RMG has had consecutive downturn in export in December by 9.64 per cent, which wrapped up the annual export performance for 2020 with an unprecedented fall of 16.94 per cent.
In December, woven garment export posted the worse performance since June 2020 as it declined by 18.07 per cent.
Knitwear export managed to have a relatively stable position with -0.45 per cent growth in December thanks to the demand for apparel for home use.
Referring to the data, she said Bangladesh exported 8.55 per cent less in December'20 compared to that in December 2018.
Ms Huq termed 2020 as a dark year for the industry due to the aftermath of lockdown in the Europe and USA as well as its impact on retail sale and demand, the worst-ever Christmas sales and declining trend in prices.
As uncertainties and stresses caused by the second wave still persist coupled with the unavailability of vaccine, and the impact on the global economy it would leave, this downtrend in exports will probably continue till April of this year, she noted.
The BGMEA president also sought help to look at the industry perspective and help them frame their narrative for policymakers to pay heed to the real situation and not the perceived one.

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