Textile makers’ woes mount as smuggling reduces production to $40m

Nigeria’s textile industry seems to be at its lowest ebb as smuggling of fabric materials from other countries, particularly African markets, has whittled down annual local production to $40 million, as against over $100 million obtained few years ago, data from the World Bank show.

The data, which were used by The Economist in its latest research entitled, ‘Enabling a more productive Nigeria: Powering SMEs,’ also reveal that textiles smuggled into Nigeria through Benin every year are worth $2.2bn.

While enumerating various problems that stifle Nigerian industries, The Economist, a multinational media firm, said an even bigger threat are illegally imported Chinese-made fabrics imitating Nigeria’s signature prints, which some customs officials are turning a blind eye to.

The research shows that imports of these Chinese products comprise 85 percent of the market, despite the fact that importing such textiles is illegal.

“If policymakers wish to nurture their homegrown industries by protecting them from import competition, a far better option would be to crackdown on illegal smuggling and pirating of goods from abroad—a far greater threat,” said The Economist.

Nigeria’s textile industry has been worst hit by smuggling which has continued to happen in the full glare or seeming complicity of some corrupt officials of the Nigeria Customs Service (NCS), according to analysts.

Coupled with this is the import of cheap but substandard textile materials from China and other Asian countries that have continued to make locally made fabrics un-competitive.  The situation has been worsened by harsh business environment in the country that has been pushing up to raise production costs of textile firms. Findings have shown that in many cases, production costs of locally made textiles are higher than the market prices of substandard and fake products, thus making it difficult for local players to compete effectively with importers.

“The major problem is the influx of foreign textiles into the country. This is killing the industry. As at today, almost 80 percent of textiles in the country are imported. Though it is still under ban, it’s still smuggled,” said. Paul Jaiyeola Olarewaju, director-general, Nigeria Textile Manufacturers Association (NTMAN), in an earlier interview with Real Sector Watch.

Inconsistent policy has also continued to wreak havoc on the sector as successive administrations have failed to come up with a practical roadmap that will save the sector from total collapse.

The 100 Billion Cotton, Textile and Garment (CTG) Fund established in 2006 and re-launched this year, has failed to raise the sector as stakeholders say funding is not the basic industry problem but smuggling, patronage and power.

Nigeria’s uniformed agencies have consistently failed to patronise local firms, having been relying on contractors that import textile materials.

The continuing closure of ginneries in the Northern part of the country, where cotton is ginned, has also worsened the sorry state of the sector, according to Usman Garba Saulawa, director-general, Kaduna Chamber of Commerce and Industry.

“People are no more into cotton production. Only few ginneries are involved in cotton,” he said, in a recent telephone interview.

Currently, the number of companies producing fabrics has hit an all-time low of 10, from 34 reported by 2010. The only surviving firms are African Textile Manufacturers Limited, Angel Spinning and Dyeing Limited, Spinners and Dyers Nigeria Limited, Tofa Textiles Limited and Lakhi Textiles, among other five.

By 1980s, the Nigerian textile market had become the third largest in Africa, with over 160 vibrant mills and more than 350,000 direct and indirect jobs generated in the industry.

In 1985, the number had risen to 180, while over one million Nigerians had been gainfully employed in the sector. Companies like United Nigerian Textile Limited (UNTL), Aswani Textile, Afprint, Asaba Textile Mills, Edo Textile Mills, among others, were at the forefront, while the country’s textile capacity in West Africa was about 60 percent. But all these have now changed.