Revitalisation of the textile industry

In 2012 the Minister for Trade and Investment, Olusegun Aganga initiated the one of the most recent attempt to revive the textile industry through reinvestment of a 20 per cent levy on imported textile materials, which was described as a deepening of its intervention in the industry. The government had previously set aside N100 billion under a Textile and Garment Development Fund to aid primary producers, textile manufacturers and other industry operators in 2009. But two years on, the textile industry is still in coma.

The textile industry in Nigeria used to be the largest in Africa after Egypt, with over 250 vibrant factories operating above 50 per cent capacity utilisation. The industry provided employment to the largest number of Nigerians in the manufacturing sector and contributed considerably to Nigeria’s GDP and tax revenue; it accounted for over 60 per cent of the textile industry capacity in West Africa, empowering million of households across all geopolitical zones of Nigeria; with the backward integration programme instituted by many firms in the industry following the strict government directive on the issue in the mid-1980s, the level of domestic sourcing of raw materials was put at about 64 per cent in 1991, a steady improvement from 52 per cent in 1987 and 57 per cent in 1988. Then, the local textile market had a share of about 20 per cent of Nigeria’s textile products, with the balance of 80 per cent being imported. In fact, in the early 1990’s, most of the local needs were met by local industry, the balance being made up by high quality fabrics entering through unofficial trade from Holland, Austria, China, and Japan. At the same time, exports were estimated at between 25 percent and 30 percent of production, making the industry an important earner of foreign exchange.  But unfortunately, this sector, which used to generate about $2 billion annually for the country across the value chain, suffered the decline which government has been trying to deal with.

The collapse of the industry was driven largely by smuggling at the borders, failed government policies, high costs of doing business arising from prohibitive raw materials, energy cost, and a plethora of challenges which has plagued the investment climate in Nigeria.

In the last decade, the government has tried to pay more attention to the sector and to put necessary measures in place to revive the ailing industry. For example, the Obasanjo administration came, made promises to resuscitate the sector, but all the promises to the comatose sector, including a commitment to bail out the sector with N70 billion at that time, ended up as mere farce and political statements. And more recently, during the Lamido Sanusi’s era at the Central Bank of Nigeria, the source of other bailouts totalling N500 billion in 2010 to the manufacturing sector (inclusive of the textile sub-sector); it has also been a huge disappointment as the results are yet to be declared. According to some Analysts, well-intended as the bailouts might be, the failure of government to provide evidence of how the massive fund infusion so far has aided the recovery of the textile industry raises serious doubts about the government’s strategy to date.

However, we do agree with Olusegun Aganga that we must diversify our economy by industrialising our country, and one of the areas to focus on within the next few years should be the development of the textile sector. More so, because we believe that as the federal government continues to make frantic efforts towards finding a solution to the country’s galloping rate of unemployment, the textile industry should be seen as a veritable platform to provide massive employment. Thus, there is a need for government in collaboration with stakeholders to review the strategies with a view to fashioning out an effective solution to revive the textile industry.