September 24, 2022
  • September 24, 2022

The disappearance of the Nigerian textile industry

By on May 3, 2022 0

The Nigerian textile industry is clearly heading towards extinction unless urgent measures are initiated and implemented by the Federal Government, writes Onwuamaeze Dike

The Nigerian textile industry appeared to be in its final decade and could be gone by 2030. If that happens, it wouldn’t be the first time the federal government, under the current democratic dispensation, has folded its hands and watched a segment country strategy. the industrial sector falls into oblivion. It happened with the tire manufacturing industries that collapsed in the first decade of this century. This also happened with the paper industry about ten years ago. And the inglorious trend of industrial shutdown is about to happen in the country’s textile and garment industry.

On Friday, April 22, the Managing Director of the Nigerian Textile Manufacturing Association, Mr. Hamma A. Kwajaffa was in a pensive mood when THISDAY called to inquire about the state of the industrial sector. Kwajaffa told THISDAY that the textile sub-sector of the Nigerian industrial landscape is currently on life support as it struggles to stay afloat.

He said some operators in the subsector were closing their textile factories due to their inability to stay in business due to lack of access to the domestic market as Nigerian fabrics are too expensive to compete with cheap imported textile fabrics.

Today, Nigeria, which once boasted of nearly 200 textile mills, no longer has 20 mills still in operation. Moreover, the sector that employed 500,000 workers at its peak is no longer growing to 20,000 workers.

Moreover, the industry has not been able to attract new investors for decades, even though a study by the United Nations Industrial Development Organization (UNIDO) entitled “Vision 2015 for the industry of cotton, textiles and garments in Nigeria,” said the textile industry has shifted from developed to developing and less developed countries which have embarked on strategic policies to support the development of their textile industry. Those countries that give high priority to the textile industry, according to UNIDO, are China and India as well as Bangladesh, Vietnam, Cambodia, Ethiopia and Burkina Faso.

Fabric Segment

In the fabrics segment of the Nigerian textile industry, some of the companies that were operational in the first quarter of 2022 included Sunflag Industries, Woolen and Synthetic Textile Manufacturing Limited, African Textile Mills, Funtua Textiles, and Nichemtex Group.

Also, some notable players in the bag segment of the industry are Dangote Agrosack, Mamuda Sacks, Nigeria Bags Manufacturing, and Northern Bags. Additionally, Haffar Industrial Company Limited is still operating in the yarn manufacturing segment.

Currently, imported fabrics and garments are expected to control over 95% of the Nigerian textile market. This reality was highlighted by a recent trade statistic released by the Nigerian Bureau of Statistics (NBS). The report, titled “Commodity Price Indices and Terms of Trade,” showed that textiles are now the top imported product in the country. This is despite the removal by the Central Bank of Nigeria (CBN) of textile imports from the official foreign exchange window to discourage their importation and encourage the consumption of local products.

But rather than reducing its imports, NBS trade statistics showed that textile materials were the most important items that accounted for the country’s import index in 2021. The bureau estimated that the value of imports in 2020 was of N19.89 trillion, having increased by 17.32 percent. cent year-on-year from 2019 to 2020, with imports amounting to N16.96 trillion in 2019.

The BES said: “The All Commodities Group import index increased by an average of 0.47%. The largest increase was recorded by textiles and textile articles, followed by boilers, machinery and appliances, their parts and wood and articles of wood, charcoal and articles.

NUTGTWN takes action

The NBS report angered the National Union of Textile Garment and Tailoring Workers of Nigeria (NUTGTWN) that the Acting General Secretary of the union, Mr. Ali Baba, wrote a letter dated April 14, 2022 and titled “Request for Urgent Union Meeting on the State of the Industry,” at NTMA.

Baba said in the letter that “the union is truly disturbed by the depressing state of the industry despite our efforts and actions for its revitalization.

“We are even more concerned about the latest report published by the BNS as contained in most national dailies on April 14, 2022, which indicated that textile materials were unacceptably high on the list of products imported from the country in 2021.”

He recalled that at 86 of the NUTGTWNe Central Working Committee (CWC) on March 31, 2022, in Lagos, the issue of the state of the industry formed an important part of its discussion.

The union also recalled that it had issued a press statement as part of its broad campaign to revive the textile industry in Nigeria, calling for urgent action by the government to address critical challenges undermining the industry growth and prospects.

The NUTGTWN therefore proposed to the NTMA as ongoing partners that “recent development necessitated the need for an urgent meeting between the union and the employers’ association to discuss and determine the actual state of the industry and agree on far-reaching measures to advance our common campaign for the full resuscitation of industry and the creation of decent jobs en masse.

Kwajaffa told THISDAY that the federal government should crack down on smuggling of textile materials while ensuring that legitimate importers are compelled to pay the correct duties and levies. This would help secure the domestic Nigerian textile market.

He also said the government should establish textile industrial parks to solve infrastructure problems; solve raw material problems by using initiatives specific to cotton production such as BT Cotton and the creation of a cotton purchasing centre.

He would also like the government to improve the investment climate through the establishment of tax regimes via the abolition of taxes on equipment and inputs.

Make the industry competitive

Kwajaffa noted that Ethiopia has made its textile industry competitive even in international markets through the establishment of Textile Park, which brought together all the textile companies in the country in one place where they received the infrastructure facilities they needed to grow their business. Company.

He was also concerned that the textile industry had not seen the benefits of the Textile Adjustment Tax (TAT), which imposed a 10% levy on imported textile materials 35 years after it was introduced in 1987. argues that the TAT would have been used to establish a textile bank in the country that would provide the industry with interest-free loans. He based his argument on the NBS report that $4 billion worth of textile materials were imported into Nigeria in 2016.

THISDAY’s survey showed that even the commendable intervention of the Central Bank of Nigeria in the textile industry could not reach all segments of the textile industry. He is reliably informed that the intervention fund has stopped at the cotton and ginning segment as the CBN claimed that it is reconciling the accounts of the funds it has disbursed so far .

THISDAY also discovered that the textile industry is caught between two federal government counter-policies. On the one hand, the government wanted the industry to rely on locally produced cotton for its textile materials to help the government’s backward integration industrial policy. But on the other hand, the government encourages cotton producers to export their products in order to diversify the country’s sources of foreign exchange income.

The resulting effect of this policy is that having tasted hard currency, Nigerian cotton farmers are no longer willing to sell their products locally.

In addition, the moribund state of Nigerian refineries prevented textile manufacturers from having access to polyester which would have served as an alternative to cotton.

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

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 country’s cotton-producing belt”.

He added that the Nigerian government has been slow to implement its policies in the sector like the National Cotton, Textile and Garment Policy which was approved in 2015 and revised in 2018.

He also explained that Nigeria has been unable to attract new investment in the textile industry due to the prevailing conditions in its operating environment.

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

He also identified marketing issues such as smuggling and dumping that made the cost of domestically produced textile materials less competitive.

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

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