Right strategy for textile industry revamp – Punch

Quite rightly, the Senate has reminded the Nigerian authorities of the need to focus greater attention on the resuscitation of the textile industry if the country’s desire to boost manufacturing and create jobs is to become a reality. With unemployment rate hovering at 23.1 per cent, reactivating the textile industry, once a major employer of labour, second only to the civil service, becomes an imperative.

However, the Senate seems to be going about its noble quest the wrong way, by calling for a five-year ban on imported textile materials so that local production would bloom. The question is: when the local textile industry was booming, was there any form of restriction on imported materials? Agreed that unbridled imports of goods could be detrimental to the growth of the local industry, yet, in the case of the textile industry in Nigeria, there was more to its dramatic collapse than unrestrained imports of foreign textiles.

This is where the phenomenon of smuggling comes in. With normal imports, it is easier to monitor and control what comes legally into the country through the imposition of appropriate import duties and implementation of other relevant measures. But the failure to adequately police the country’s borders has paved the way for the massive smuggling of cheap goods, sometimes of doubtful quality, thus killing incentives for local manufacturing. It has unsurprisingly sounded the death knell of many otherwise promising local industries, including textile.

Besides, lack of regular power also played a major role in the collapse of Nigeria’s erstwhile flourishing textile industry, contributing to the high cost of production, which rendered the final products comparatively expensive and unaffordable. According to the Manufacturers Association of Nigeria, in its 2018 performance review, the absence of constant electricity supply drove up the cost of production by 40 per cent. A report quoting data from MAN shows that manufacturers spent N43 billion on private power generation in the first half of 2018.

Senators, while debating a motion sponsored by Kabir Barkiya of Katsina State, demonstrated sufficient awareness of the importance of the textile sub-sector of the manufacturing sector to the overall well-being of the economy and called for ample measures to guarantee its protection. Unfortunately, many of them do not patronise local goods. In the past, during the military regime of Murtala Muhammed and Olusegun Obasanjo, every government official was mandatorily required to patronise Peugeot vehicles, then assembled in Nigeria. But now, the taste of public officials is conditioned for foreign vehicles and imported textile materials.

When Jerry Rawlings, Ghana’s iconic former leader, was at the helm of affairs, he never wore anything other than local materials. His patronage of local textile materials resulted in a boom, in the domestic textile sector, as every highly placed official decided to imitate the leader. In fairness to the former Minister of Finance, Ngozi Okonjo-Iweala, there was never a time she was seen in foreign attire; as a minister, she was always in outfits made from local fabrics. But most senators and other political office holders do not wear local fabrics. The taste for foreign materials has to give way to patronage of local products.

At the height of the boom in the textile industry, Nigeria boasted over 180 companies, directly employing close to 450,000 people, according to the Central Bank of Nigeria Governor, Godwin Emefiele. Imagine the impact that 450,000 people in employment would have on the economy. Not only will the tax net be widened and disposable income increased, the impact on lives of the immediate and extended families across the country would be immeasurable.

But reviving the moribund industry is going to be very challenging; it means trying to reverse more than two decades of consistent decline, which has seen the number of textile companies plummet from 180 at its peak to just 20 now. It will test the mettle of officials at the highest level of government, including the President, Muhammadu Buhari. This is why the interest shown by the CBN has been very encouraging. The CBN, at a stakeholders’ meeting in Abuja, had said that reviving the sector was vital to the country’s growth objectives and job creation. This also falls into line with Buhari’s promise to lift 100 million Nigerians out of poverty in 10 years.

“We have decided to implement a few steps which we believe will support the revival of the textile sector,” the CBN governor said. Gone with the textile factories has been the culture of cotton growing in the country, which was a source of livelihood to many rural Nigerians. It is, therefore, heartening to hear Emefiele promise to extend the Anchor Borrowers’ Programme, which has been used to encourage interest in rice growing, to cotton farming.

Aside from efforts to source high-yielding seedlings for the farmers, the apex bank, very importantly, is working on the creation of designated areas where electricity would be guaranteed for textile companies. While not adopting the Senate model of banning textile imports, the CBN boss has restricted access to foreign exchange for the import of foreign textiles. This means whoever wants to import would not be stopped, but would not get foreign exchange from the CBN.

These are laudable measures which, if implemented religiously, are capable of resuscitating the comatose industry. This will save Nigeria the N4 billion that is reportedly spent on imports of foreign textiles annually. The direct consequence of job creation is a reduction in the level of crime, especially kidnapping, armed robbery, banditry and terrorism, that is currently rocking the very foundation of the country.

Currently estimated at $920 billion, the global textile industry is expected to grow by 4.4 per cent and reach $1.2 trillion by 2024, according to Mordor Intelligence, a market research outfit. Nigeria stands a chance of being a part of this growth if the government can provide an enabling environment for the revival of the textile industry.

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