Textiles manufacturing was once the second largest in Africa and the second largest employer of labour in Nigeria after agriculture. In its golden years in the 1980s, the sector had over 250 vibrant factories and held more than 60% of the textiles manufacturing capacity in West Africa. It generated about $2 billion annually across the value chain, employing and clothing millions of Nigerian households.
According to a United Nations University report, there were hundreds of textile firms in the country in 1987, operating 716,000 spindles and 17,541 looms. The sector recorded an annual growth of 67% between 1985 and 1991 and employed about 25% of the workforce in the manufacturing sector in 1991.
Even at its significantly downgraded state of operation, its estimated size of N380.8 billion or 0.47% of aggregate GPD places it ahead of cement manufacturing. The underlying potentials of the textiles industry as highlighted warrants no less than the protective fiscal policies and incentives that have turned cement importers into manufacturers.
This prospering sector was silenced by a fundamental error of leading Nigeria into the World Trade Organisation (WTO) at a time that the textile sector was still struggling to defend its 20% market share. Soon in 1995, WTO adopted agreements on textiles and clothing, which removed all quotas on the products among WTO member countries. This single policy change took life out of the Nigerian textiles business and gave it out freely to China. Today, China accounts for more than one-half of the global textile market valued at about $400 billion as at 2010.
The challenge of sewing the textile sector back into its former glorious shape has fallen on the door step of Dr. Olusegun Aganga, minister of industry, trade and investment. The man, who can rightly be described as the champion of backward integration model, has taken steps that are presently raising glimmers of hope in the operating horizon for a sector that he picked up from industrial abyss. Hundreds of textile firms that simply vanished under the most lethal operating climate imaginable are beginning to reach green pastures again.
Textile manufacturers were seemingly taunted with a bailout fund of N70 billion at a time of great need, which failed to come. The era of failed promises ended with the coming of Aganga. The revival of the textile industry has truly begun with the policy of reinvesting 20% levy on imported textiles. According to him, the main objective of the levy is to promote the development of the textiles sector and the target is to boost local production. Development of the textiles sector is his focus in the effort of his ministry to diversify the economy through industrialisation.
We commend the effort of the minister and the present government in taking steps to create an enabling environment for industries generally to flourish and the textiles sector in particular- which is labour intensive. With the progress made so far in reviving the textiles sector, industrial engines are beginning to roar once again and people are increasingly returning to work. Major improvements in capacity utilization were reported as far back as 2011 with the textiles sector acknowledged to be a major contributor to the overall increase in industrial capacity utilization.
The sector needs additional incentives however to enable textiles manufacturers increase production, create new jobs for Nigerians, meet the demand of our large internal market and warm up to launch into the export market. The backward integration model, which has worked so well in cement manufacturing, should be wholly applied in propping up the textiles industry as well.
Government should not lose sight of the problem of smuggling across the borders and other sharp practices such as false labeling of ‘made in Nigeria’, which were some of the major factors that undermined local textiles manufacturing. Government needs to ensure policy consistency, as past policy mistake has cost us so much in terms of the total destruction of such an important sector as textiles. Preferential sweeteners should be introduced to smoothen the effects of the high cost of doing business on textiles manufacturing.
Nigeria used to be the major supplier of good quality wax-resist textiles, which were driven out of the market by cheap imitations from China. Can Nigeria’s textiles sector return to its former glory? The answer is yes provided the backward integration imitative that Aganga has started is not lost somewhere along the path of policy inconsistency that is the bane of policymaking in this country.
Nigeria needs to build the industrial base first before adopting free trade practices. We have learnt this lesson the hard way with injuries of past policy misconduct yet to heal. We hope we will not have course to repeat the policy blunder whether in textiles manufacturing or in any other sector of the economy.
