Textile Industry: Still on the Brink

Stakeholders in the Nigerian textile industry have argued that only urgent intervention by the federal government would save the industrial sector, writes Dike Onwuamaeze

The President of the Nigerian Textile Manufacturers Association (NTMA), Mr. Folorunsho Daniyan, arrived at the scheduled press conference on the state of the textile industry on May 12, 2022, conscious that the textile industry in Nigeria is on the verge of collapse. Daniyan told journalists that the conference was called to address the state of poor competitiveness of Nigeria’s textile industry.

He said: “Ordinarily, the year marking our 65th anniversary (which is this year) should have been time for celebration and popping of champagnes. But this, sadly, is not our situation. If the truth must be said, our industrial sector is dying and needs urgent interventions from the federal government to keep it alive.”

He then went on to recount the steady decline of the industry. “First, our membership has shrunk from 175 textile industrial firms in 1985 to less than 20 currently in 2022. Employment-wise, the number of jobs provided by the industry took a dive from 137,000 jobs in 1996 to 24,000 jobs in 2008. Today the number of jobs provided in the industry is less than 20,000 jobs.

“This is sad for an industrial sector that was once adjudged the highest employer of labour in Nigeria after the federal government in the 1980s when it had 500,000 workers under its employment, “he said.

Nigerian textiles used to be a key manufactured product that was exported through the formal channels and by way of cross-border trade in West and Central Africa. However, the export of textile products suffered a setback between 2003 and 2008. Textile exports touched their lowest ebb in 2006 however recovered some lost ground in 2007and 2008. Today, the situation is even worse as our exportability is next to zero.” 

NBS Report

Nothing could have illustrated the apparent loss of competitiveness and relevance of the Nigerian textile industry better than the recent trade statistics report that was released by the Nigerian Bureau of Statistics (NBS).  The report, which was titled “Commodity Price Indices and Terms of Trade,” showed that textile finished products were the number one imported product on the country’s import index in 2021. 

This remained the reality in spite of the Central Bank of Nigeria’s (CBN) removal of textile import from the official foreign exchange window to discourage its importation and motivate consumption of local products.

But rather than reducing its importation, the NBS trade statistics showed that textile materials were the highest items that accounted for the country’s import index in 2021.  

 The NBS said: “The all-commodity group import index on average increased by 0.47 per cent. The highest increase was recorded by textile and textile articles, followed by boilers, machinery and appliances, parts thereof and wood and articles of wood, wood charcoal and articles.”   

The report of the NBS riled up the National Union of Textile Garment and Tailoring Workers of Nigeria (NUTGTWN). The President of NUTGTWN, Mr. Ali Baba, said that “the union is really disturbed by the depressing state of the industry in spite of our efforts and actions for its revitalisation.

“We are even more worried about the latest report released by the NBS as contained in most national dailies of April 14, 2022, which indicated that textile materials unacceptably topped the list of the country’s imported commodities in 2021.”

Imported fabrics

The NTMA estimated that more than 95 per cent of Nigeria’s domestic textile market is dominated by imported fabrics and clothing materials.

He recalled that during the   NUTGTWN’s 86^th Central Working Committee (CWC) on March 31, 2022, in Lagos, the issue of the state of the industry formed a major part of its discussion.

The union also recalled that it had called for urgent measures by the government to address the critical challenges undermining the growth and prospects of the sector but to no avail.

The NUTGTWN, therefore, proposed to the NTMA as partners in progress that “recent development has necessitated the need for an urgent meeting between the union and the employers’ association to discuss and ascertain the true state of the industry and agree on far-reaching measures to advance our joint campaign for complete resuscitation of the industry and creation of mass decent employment.”

State of Industry

Daniyan observed that the textile industry is still faced with many serious challenges in spite of the past efforts by the government and operators to revive it. These challenges included high-cost production that has rendered Nigerian textile products non-competitive; unrestrained smuggling and counterfeiting of Made-in-Nigeria textiles; poor patronage in spite of the Federal Government of Nigeria’s Executive Order 003 of 2017 (that mandated federal government ministries, departments, and agencies to patronize made in Nigeria products), inadequate and costly electricity supply, poor infrastructure, high taxation, and interest rates, high cost of diesel and LPFO and the depreciating value of the naira.

He noted that the fate of the industry is worse in the northern part of the country due to heightened insecurity.  

“We wish to emphasise that the government must do more to provide the enabling environment for the revival of the textile industry in Nigeria and manufacturing activities in general.

“We also frown at the Nigeria Customs Service (NCS) for not effectively combating smuggling such that cheap smuggled textile products largely from China and other Asian countries continue to dominate the local market with little or no access to locally produced textiles. 

“We, therefore, call on the NCS to be more patriotic and adopt new creative measures that must include consistent raids of the warehouses of smugglers in Kano, Lagos, Kaduna, Onitsha, and other cities of the Federation.

 “We also demand the establishment of a Presidential Task Force that is made up of relevant stakeholders, including the textile manufacturers and union, with the power to confiscate goods smuggled into the country and recall that a similar task force existed during the administration of former President Olusegun Obasanjo.

“We also wish to state clearly that the promised benefits of the African Continental Free Trade Agreement, (AFCFTA) will elude Nigeria if the illegal imports of textile fabrics and other products Nigeria have the capacity to produce locally continue to find their way into the Nigerian markets unchecked.”

Yet, a fully revived textile industry is capable of creating millions of jobs, addressing security challenges in the country, improving internally generated revenue for the government, reduce the pressure on the country’s foreign exchange market while earning foreign exchange for the country.

Reviving textile sector

However, a Presidential Aspirant in Peoples’ Democratic Party (PDP), Mr. Peter Obi, has promised to revive Nigeria’s textile sector if elected president in 2023.

Obi said: “Last year, Bangladesh earned $36 billion from the export of textiles while Nigeria earned $15 billion from oil. The textile complex in Kaduna is the largest in Africa. I will revitalize it. Nigeria can earn more money from textiles.”

Similarly, a former Senator and Kaduna State Governorship Aspirant, Senator Shehu Sani, pledged to revive the textile industry in the state.  

Sani said: “Another major agenda I have is the reactivation of moribund textile industries in Kaduna and provide necessary employment to our people.”

 Ironically, textile industries are closing in Nigeria and are unable to attract new investors for decades at a time a study carried out by the United Nations Industrial Development Organisation (UNIDO) titled “Vision 2015 for Cotton, Textile and Garment Industry Nigeria,” stated that the textile industry has been shifting from developed to developing and less developed countries that have embarked on strategic policies to support the development of their textile industry.  These countries that have given high priority to the textile industry, according to UNIDO, were China and India as well as Bangladesh, Vietnam, Cambodia, Ethiopia, and Burkina Faso.

The Director General of NTMA, Mr. Hamma A. Kwajaffa, noted that Ethiopia made its textile industry to become competitive in the international markets through the establishment of a textile park, which brought all the textile firms in the country to one location where they are provided with the infrastructural facilities they needed to boom their business.

Raw materials Challenges

The Acting Executive Secretary/Chief Executive Officer of the Nigerian Investment Promotion Commission (NIPC), Mr. Emeka Offor, told THISDAY that the Nigerian textile industry is faced with the challenges of supply of raw materials.

Offor said: “Cotton has always been a driving force for the whole textile industry in Nigeria, but with great neglect of agriculture, it has caused a substantial decrease in cotton production, especially in the cotton production belt of the country.”

He added that Nigeria’s government has been slow in implementing its policies in the sector like the National Cotton, Textile, and Garment Policy which was approved in 2015 and reviewed in 2018.

He also explained that Nigeria has not been able to attract new investments into the textile industry because of the prevailing conditions in its operating environment.

These conditions, according to Offor, included infrastructural bottlenecks like frequent power failure from the public power sources and the high cost of diesel, black oil, etc., to generate alternative power.

He also identified marketing challenges like smuggling and dumping which made the cost of textile materials produced in the country less competitive.

He warned that direct and indirect jobs offered by the industry would be lost if the decline in the sector would not be reversed. 

In addition, “Nigeria will not benefit in the manufacturing sector in the textile sub-sector in the African Continental Free Trade Area (AfCFTA). The country will become a dumping ground for all manner of textile materials and garments and accessories,” he said.