Time to Save the Gasping Textile Industry

The ailing Nigerian textile industry needs urgent surgical operation and resolute determination of the federal government to bounce back to reckoning again writes Dike Onwuamaeze

The textile industry in Nigeria is dying by installments. It bears the features of an industrial sector in its last gasp of steep decline. Its operators are concerned that the industry might go into extinction unless an urgent surgical operation is administered to resuscitate dying industry.

THISDAY was told that in the mid-1980s and earlier part of the 1990s, the textile sub-sector of the Nigerian manufacturing sector had almost 175 textile mills operating in the country that employed as many as 500,000 workers.

However, current realities are indicating that those good old days when the textile industry was the highest employer of labour in Nigeria after the government might have be lost irretrievably.

Currently, the organised textile and garment sector have only 25 active textile mills and employed barely 25,000 workers. The Nigerian Textile Manufacturers Association (NTMA) said that these active mills are running below 25 per cent of their installed manufacturing capacity. Some of the textile mills operates in fits and starts while almost all of them have reduced their operations from three shifts per day to a single shift.

THISDAY’s investigation also revealed that the number of textile mills that were engaged in production of mosquito nets in Nigeria has gone down from 30 to just one. The rest ran into misfortune and closed shop. The investigation also revealed that no new investor came into the subsector for over a decade because of its parlous state.

The NTMA told THISDAY that the cumulative effect of the poor state of the textile industry is that over 90 per cent of textile products on sale in Nigerian markets today were either imported legally or smuggled into the country. Yet, industry sources told THISDAY that, “on a replacement basis, the present installed textile manufacturing capacity in Nigeria represents a $3 billion investment.” Moreover, “the Nigerian short-staple spinning installed capacity is ranked number two in Africa after Egypt with long staple spinning. However, the sector is largely over aged.”

The President of the NTMA, Mr. Folorunsho Daniyan, told THISDAY recently that the textile industry in Nigeria is in dire strait and needed urgent surgical operation to survive.

Daniyan summed up the condition of the industry thus: “The state of the textile industry is an unfortunate one. To give you a graphic picture of where we are in today, I will take you back to where we were years ago. Then, we had about 175 factories but now we have 25 or less that are functioning and most of them are operating below 25 percent of their installed capacity utilisation. This has already painted the picture of where we are now; that the industry is in dire strait and needs serious surgical operation and assistance from the government and people of goodwill to bounce back.”

He traced the decline in the fortunes of the textile industry to the liberalisation of the import policy of the country to such an extent that anything comes in. This started with the implementation of the Structural Adjustment Programme (SAP) in 1986 by the former military ruler, President Ibrahim Babangida.

Trade liberalisation policy

The trade liberalisation policy has been sustained by successive regimes at a very high cost for the domestic textile manufacturers that could not compete with imported products from Asia and other parts of world due to the constraints in Nigerian business environment.

“Gradually our capacity utilisation and operational factories started dwindling because of unfair competition from imports from Asia and other parts of the world. We produce fabrics that are 100 per cent cottons, at an average cost of N3000, N4000 per six yards. But synthetic textile materials are coming in from Asia at N1000 per six yards. So, there is no competition. So, it is a big problem. So, we need the government, especially the Nigerian Customs Service (NCS) and the Standard Organisation of Nigeria (SON) to wake up to their responsibilities and enforce the laws and standards that are applicable to the country’s textile industries.

“The SON gives us (local manufacturers) standards that we must meet, but it does not enforce these standards on imported textile materials. So, there is some double standard in the whole thing,” Daniyan said.

The NTMA recently listed some of the constraints hindering the growth of the textile industry in Nigeria. It said: “When benchmarking a number of Nigerian input cost factors with a panel of countries with which Nigeria competes, it is evident that Nigeria has high cost for the most important inputs like cost of power/kwh, cost of water, cost of steam/kg, cost of labour, cost of interest on credit and age structure of the equipment installed in Nigeria.”

Other challenges besetting the textile industry in Nigeria, according to the NTMA, smuggling, influx of substandard textiles materials and thriving sale of “faked” patents of textile designs that belonged to Nigerian textile manufacturers.

The association alleged that the Nigerian Customs Service (NCS) and the SON are often lethargic in dealing with smuggling and the sale of faked and substandard textile materials in Nigerian markets.

The association is, therefore, urging the federal government to take similar measures that have worked effectively in other countries to curtail these illicit practices in Nigeria. “When the textile industry was dying in Ghana, the Ghanaian government set up a special task force to combat textile smuggling. The taskforce was made up of various agencies and its sole purpose was to combat smuggling of textile into Ghana. Now, the textile industry is on the rise again in Ghana,” Daniyan said.
Impact of Smuggling

The association alleged that smugglers are having a field day in the Katunguri Market, Kano, where he claimed that not less than 20 truckloads of smuggled fabrics came into the market on daily basis without being challenged by the NCS.

“Take a visit to Kano market and you will see that over 90 per cent of the African prints (Ankara materials) on sale in the state were smuggled. How do they get across the borders? The customs are paying lip service to its duties. We have made presentations to the comptroller general of NCS during a meeting in his office some years ago to draw his attention to these things. We also informed him that even some of our intellectual properties are being copied. He said that he would get in touch to us but nothing came out of it,” he said.

Daniyan stated that the fortunes of the subsector would grow by 30 per cent if smuggling could be brought down by just 10 per cent.

He said: “The future of the Nigerian textile industry depends on the will power of the government to protect it. The potentials are here. The basic raw materials are here. Experienced workforce is here. The projection we have is that if smuggling is curtailed by as much as 10 per cent about 30 per cent of textile companies will come back to operation and capacity utilisation will go up. The fate of the industry is in the hand of government because if the government will breathe down on the NCS something will happen.”

The federal government has taken some notable steps to alleviate the condition of the textile industry and enable then to sustain their production through the provision of several grants by the Central Bank of Nigeria (CBN) through the Bank of Industry (BOI).

Executive Order 003

Another major step taken by the government is the proclamation of the Executive Order 003 that mandate federal ministries, departments and agencies, to give precedent to made in Nigeria products in their procurement of goods and services.

The NTMA argued that effective implementation of the order would help to stimulate national demand for local textile materials for the making of uniforms for the Nigerian military, para-military organisations, police, primary and secondary schools, nurses, etc. The order enjoined ministries, departments and agencies of the federal government to give precedent to locally made goods in their procurement of goods and services.

But, “the fact is that none of the agencies has purchased a meter of cloth from the Nigerian textile manufacturers. It was only during the COVID-19 period that a little quantity was purchased from our members. Since then, nothing has been done. The NYSC was the only agency that tried to do something with us. Kenya did it and is not regretting today,” Daniyan said.

Few weeks ago, a committee of the Nigerian Senate was startled to discover that the federal government proposed in its 2022 national budget to borrow $200 million to import mosquito nets in order to fight malaria even though a textile mill that could produce the tent.

The Managing Director of Rosies Textile Mill, Aba, Mr. Nnamdi Oji, told THISDAY that there is no need to import the mosquito nets, which could be supplied locally by his company.

Oji said: “I have supplied to Global Fund. I have supplied for some World Bank projects. My product has World Health Organisation’s certification. I’m also certified by the NAFDAC to produce net. I do not see why such order should not come to me to generate employment in the economy and increase my capacity to supply beyond Nigeria.”
However, all the agencies interviewed by THISDAY in the course of investigating this story claimed to have been implementing the EO 003.

The Spokesman of the Nigeria Army, Brigadier General Nwachukwu, said: “For the past six years we have been procuring our uniforms from within the country. There are two major companies that we buy from. One of them is the Sunflag Textiles and the other is Wollen Synthetic. Beyond uniform, we are patronising Nigerian made armaments and vehicles.”
Ditto the NCS and the Nigerian Immigration Service, which claimed to be sourcing their uniforms from Nigerian producers.

The NCS also pooh-poohed the allegation that smuggling of textiles is a booming business in any part of the country, particularly Kano.

NCS Denies Allegations

The Public Relations Officer of the NCS, Comptroller Joseph Attah, challenged those making the allegations to provide intelligence to the customs and see them swing into action.
Director General of Nigeria Textile Manufacturers Association, Mr. Hamma A. Kwajaffa, has pleaded strongly that the federal government should allow members of the NTMA to enjoy the benefits of the sugar levy.

He explained that, “this levy is development tax for local manufacturers on any imported textile material. The essence behind this levy is to enhance our competitiveness by using them to defray some of our overhead cost.

“In 2016, the NBS statistics stated that Nigeria recorded $4 billion worth of imported fabrics into Nigeria. That gives us $400 million. That is good enough for us. But this development levy is nowhere to be found. The sugar sector is enjoying theirs but ours has become problematic to access. The facts remained that those goods that are coming into Nigeria are very cheap. We have porous borders in Nigeria that encourage smuggling.

“As far as we are concerned, government has come up with lots of good policies that failed at their implementation stages. Our problem is actually in the implementation of government policies

“Ogun is setting the right example by insisting that school uniforms must be supplied by local ‘adire’ makers.”

The SON has denied the allegation that it imposed double standards on the members of the NTMA. The Media Assistant to the director General of SON, Mr. Fashina Adebola, told THISDAY that the Nigerian Industrial Standard (NIS) is the basis for adjudging locally manufactured and imported products that are certified under the Mandatory Conformity Assessment Program (MANCAP) while imported products are certified under the SON Offshore Conformity Assessment Program (SONCAP).

Adebola said that the two programs run under same criteria in line with the World Trade Organisation procedure to ensure fairness and a level playing field in international trade and commerce, adding that SON carries out enforcement on suspected substandard textiles based on information in spite of being absent from the ports of entry since 2011.

He said: “We challenge the association to substantiate the claim. Most of the successful enforcement activities we have carried out particularly in warehouses are based on information received from stakeholders and patriots. We treat all information received in strict confidence and verify them using our established procedure.

“SON ensures provision of stakeholders’ and market driven standards developed with the active participation of relevant stakeholders and interested parties. SON provides concessions to local manufacturers for importation of raw materials and machinery.

“SON mobilises Nigerian textile manufacturers to participate in development, review and adoption of international standards at regional, continental and global levels.”

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