The boom era

The now comatose Nigerian textile industry was one of the booming sub-sectors of the nation’s economy post-independence years. Fed by locally grown cotton and with huge demand for clothing by a fast-growing population, it provided direct and indirect employment to hundreds of thousands of Nigerians and some expatriates for several decades.

The industry played a dominant role in the manufacturing sector of the Nigerian economy. With a record high of over 140 companies, the country witnessed a boom in the textile manufacturing in the 1960s to 1970s with companies such as Kaduna Textiles, Kano Textiles, United Nigeria Textiles, Aba Textiles, Texlon Nigeria Limited, First Spinners Limited, amongst others, employing about a million people, contributing about 15 per cent of the manufacturing sector earnings to the Gross Domestic Product (GDP) of the Nigerian economy and accounted for over 60 per cent of the textile industry capacity in West Africa.

It also recorded an annual growth of 67 per cent and as at 1991, it employed about 25 per cent workers in the nation’s manufacturing sector.

The story however, changed dramatically for the industry in the 1980s, as government shifted all its attention to the oil revenue, the government became reliant on oil and abandoned agriculture. The neglect of the agricultural sector had an adverse effect on the textile industry. The production of cotton, the basic raw material used for the manufacture of clothes regressed rapidly, as its production capacity declined by 50 per cent.

The collapse

According to the President of the National Union of Textile, Garments and Tailoring Workers (NUTGTWN), Comrade Oladele Hunsu, the textile industry in the 1980s was the second largest employer of labour after the Federal Government.

“However, over the years, there was a steady decline in operations of the textile firms and then an eventual collapse of the industry, which has led to loss of jobs, dearth of skilled manpower, low capacity utilization and drop in government revenue due to lack of excise duties”, he said.

He added that the dip in the fortunes of the industry was due to the influx of textiles and fabrics into the country from all over the world and mainly from Asian countries. He said the downturn in the sector was as a result of the government’s lack of political will to ban imported textile and poor monitoring of the country’s porous borders. “This will continue to impact negatively on the textile industry if not checked,” he said.

Sunday Telegraph learnt that while the country imports over N300 billion worth of textiles and garments yearly, the government loses over N75 billion per year in unpaid duties due to massive smuggling.

Poor infrastructure, electricity

Also, the trade liberalisation policies adopted in 1986 following the implementation of the Structural Adjustment Programme (SAP) saw the flooding of imported fabrics and finished goods, thereby degenerating the manufacturing capacity of the industry. By the 1990s, the degradation of infrastructure especially the lack of stable electricity supply affected textile manufacturers, as they could not keep up with the strains of production and this led to the closure of a number of textile companies with hundreds of workers rendered helpless. By 1998, the industry was operating at a capacity of just 28 per cent.

The abysmal performance of the textile industry and indeed, the entire manufacturing sector is indeed a sad tale. The sector, which played a major role in boosting of nation’s economy and development, is suddenly a shadow of itself, as the country’s manufacturing capacity especially the textile industry is at an all-time low and its poor performance is having a bearing on the Nigerian economy. Despite the fact that the overall contribution of oil to the economy has reduced drastically, the manufacturing sector unfortunately lacks the capacity to provide relief to the ailing economy, as it only contributes a paltry 7 per cent to the GDP of the economy with the textile, apparel and footwear industry contributing about N1.8 billion of that in 2015, according to the National Bureau of Statistics (NBS) report.

Reviving textile manufacturing

According to the International Textile Manufacturers Federation, (ITMF) power supply accounts for about 15 per cent production cost in the textile industry. In Nigeria, it is almost 45 per cent for manufacturers in general and particularly peculiar to the textiles. Inadequate and high cost of energy in the textiles industry has been one of the major impediments to investment in the sector.

In view of this, Comrade Hanusu said unless the combination of huge infrastructural deficits and cheap imports from Asia is tackled, the failure recorded by past attempts to revive the sector through fiscal policy and monetary interventions will befall the move by the Buhari administration to get the mills rolling again in the country’s cotton, textile and garment companies.

This came as the Minister of State for Industry, Trade and Investment, Hajiya Aisha Abubakar, who is also the chairperson of the Committee on Resuscitation of the Cotton, Textile and Garment Industry, said that an estimate of approximately N1 trillion is projected for a complete turn-around of the nation’s textile industry.

This came as it has been said that any success recorded in reviving the sector, will contribute towards actualising the goals of the Economic Recovery and Growth Plan (ERGP).

She said: “The revival of textile industry is not a lost cause as it will yield a veritable boost to the government’s agenda on diversification of the economy. It will create the much-needed employment opportunities for the teeming youths, across the value chain, save the nation the loss of invaluable foreign exchange and enhance the nation’s export potential.

However, there is the good news that Nigeria is succeeding in forecasting her cotton sector to increase production by 20 per cent in 2018, as farmers are encouraged by better returns due to increasing cotton prices and improved yields.

Also, Comrade Hanusu said stakeholders expect the government to build on the N100 billion intervention fund thrown at the problem in 2009 when the Umaru Yar’Adua administration formally inaugurated the Cotton, Textile and Garment (CTG) Revival Fund currently managed by the Bank of Industry (BoI), through loans to textile companies.

Meanwhile, BoI in 2013 said about N60 billion was disbursed to various beneficiaries under the intervention scheme and that resulted in the re-opening of United Nigeria Textiles Limited in Kaduna.

The bank added that its intervention rescued over 8,070 lost jobs, even as the capacity utilization of most beneficiaries also rose sharply from below 10 per cent to about 60 per cent.”

According to Comrade Haunsu, in reality, this is a far cry from the 500,000 job placements the industry when mills were rolling before the dip in fortunes, especially with the lifting of the official cover on importation of textiles. The situation has, of course, never been the same again.

Investment drive

Receiving the Chief Executive Officer of Vlisco Group of Netherlands, David Suddens, at the Presidential Villa, President Buhari welcomed the company’s proposed investment of $200 million in Nigeria, which will, in turn, create 700,000 jobs.

“I am very much aware of your company’s effort especially your investments in the textile industry, and it is one area that we are trying to develop because it will create employment and boost agriculture,” he said.

”To get cotton to grow again in the country is like going back to the good old days when the textile industry used to employ hundreds of thousands of people. I am very excited about the prospects of reviving the industry because it will keep farmers busy, create employment which brings more security, help the economy, transfer of technology and of course we have a large market to absorb the products.”

President Buhari in a statement by his Special Adviser on Media and Publicity, Femi Adesina, reiterated Nigeria’s commitment to forging a stronger economic partnership with the Netherlands, assuring the Dutch investor that Nigeria continues to do the utmost to keep smugglers at bay at borders.

In his remarks, Suddens told the President that the 172-year-old company plans to use cotton grown in Nigeria for production.

“I want a new strategy that brings Vlisco manufacturing to Nigeria,” he said. “I want to change the supply chain from Asia to Nigeria. For the total supply chain for cotton, textile and garment industry from weaving, spinning, printing to retail, we want to use Nigerian cotton and we have already started to encourage the creative industries in the country to find a voice and give them a platform across the world. I am convinced that it is time for the textile industry to move from Asia to Africa.”

Nigerian textile can’t compete

The Director-General, Lagos Chamber of Commerce and industry, Muda Yusuf. said that the problem with the Nigerian textile industry is high cost of production, smuggling, technology and logistics.

According to him, the global textile industry has moved on from where it used to be years ago, “and we can no longer compete with bigger brands. We cannot continue to use obsolete technology and expect to compete effectively with the rest of the world. It has now become survival of the fittest. There is also no enforcement of fiscal policy to ensure protection of the industry. The whole country is flooded with substandard and even contraband textile materials. The exchange rate and even the interest rate are not helping matters”.

Last line

Founder and CEO, Africa Fashion Week Nigeria & London, Ronke Ademiluyi, said that given the importance of high productivity of the textile industry in boosting economic growth and the standard of living of the people as evident by the examples stated above, and with the glowing success of the country’s fashion designers today as seen in both local and international fashion shows, it is apparent that Nigeria must give priority to the textile industry and indeed, the entire spectrum of the manufacturing industry to improve the fortunes of the Nigerian people and the economy.

The government must provide the enabling environment for the textile manufacturers and fashion designers to thrive. Provision of critical infrastructure such as electricity and good transport system needed by the manufacturers and designers should be made available to help them become truly productive.

Also, the recently formulated policy road map for the creation of fashion clusters, the Integrated Textiles and Garment Parks (ITGPS), should be formally adopted by the present government and ensure it implements the policy provisions to the letter.

Government should also provide funding and financial incentives for members of the textile industry, as it is done in other countries. Financial institutions of government such as the Bank of Industry (BoI) and Nigerian Export-Import Bank should endeavour to provide funds to both manufacturers and designers as this would help in the long-term to grow the economy.

Finally, there is a need for sustained dialogue by all stakeholders in the country to ensure that they undertake a comprehensive study and solutions on how to modernize, strengthen and get the industry to perform competitively locally and ultimately globally. Only by enacting all these would the Nigerian people and economy truly benefit from a thriving textile, apparel and footwear sub-sectors of the manufacturing industry.