It is on record that in 1997,the Nigerian textile industry was the second largest in Africa after Egypt’s with over 250 vibrant factories operating above 50 percent capacity utilization. Then, the local textile market controls about 20 percent of Nigeria’s textile products, with the balance of 80 percent being imported. And between 1986 and 1991, the sector accounted for 25% of total manufacturing employment, with over 300, 000 people directly employed in the sub-sector. Sadly, this sector, which spins about $1.3 billion yearly for the country, has been in dire straits for decades. The situation has forced over 175 companies to liquidate, leaving more than 250,000 workers jobless.
Records indicate that in 1987, there were 37 textile firms in the country, operating 716,000 spindles and 17,541 looms. This was the golden period of Nigeria’s textile industry. Between 1985 and 1991, it recorded an annual growth of 67 percent, and in 1991, it employed about 25 percent workers in the manufacturing sector.
The wave of closure in the industry was driven largely by smuggling at the borders, failed government policies, high operating costs arising from prohibitively expensive raw materials, energy cost, and sheer lack of political commitment to industrialisation by successive governments.
Kano, for instance, which is the leading commercial and industrial centre in the Northern part of Nigeria had about 31 textile companies which were all functional and operating at full capacity. By 2012 however, only six of them companies were afloat with just about three operating in full capacity.
In the heyday of the Kano textile industry, each of the firms employed over 3000 workers. But currently, the existing textile firms could hardly employ up to 2000 workers. Consequently, some of the industries have been forced to relocate to countries like Ghana where supply of electricity and other basic infrastructure like roads and water are guaranteed. And due to high cost of production, the prices of locally manufactured textile products have become very prohibitive compared to imported textiles thereby encouraging Chinese merchants to flood the local markets with their textile materials.
The government of former president, Olusegun Obasanjo, belatedly initiated a move to raise N70 billion through bonds of five-year duration to revive the industry. The money was named the Textile Development Fund (TDF) to assist cotton growers, textile manufacturers, and other industry operators through the Nigerian Export Import Bank, NEXIM.
However, the bond to float the facility hit the rocks due to default by the stakeholders in the project. It is in the light of this that the recent initiative by the Trade and Investment Ministry to revive the textile industry through reinvestment of a 20 percent levy on imported textile materials is received with skepticism.
Government made a fundamental mistake by pushing Nigeria into the World Trade Organization, WTO, at a time when the country’s industrial base was still very weak. In 1995, WTO adopted Agreements on Textile and Clothing, which states that all quotas on textile and clothing will be removed among WTO member countries. The main beneficiary of the policy turned out to be China. The global textile market is worth more than $400 billion at present. But, according to China Customs, the export value of China’s textile and garment alone amounted to $206.5 billion in 2010. The Nigerian textile was one of those that suffered, especially because of the cheap exports from China. Nigeria used to be the major supplier of good quality wax-resist textile, popularly called Ankara in Nigeria. However, in the early 2000, cheap imitations of these products were being produced and exported from China to West Africa.
In order to revive the industry, we advise government to intervene by ensuring low rate. the galloping rate of foreign exchange is another worrisome factor which must be tackled head on.Investment in infrastructure should be boosted to stem the tide of relocation by textile industries. to It was also difficult to get foreign exchange and deal with inflation problems in the face of imported raw materials. There should be a deliberate effort to reawaken the textile industry to serve as buffer to diversify the economy in view of the unpredictable nature of global oil price.