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Growing demand for textile materials sparks fresh call to revive industry

By Chijioke Iremeka
29 October 2022   |   2:38 am
Though demand for fabrics such as uniforms for school children, military, police personnel, as well as officials of paramilitary organisations across the country is swelling, Nigeria is obviously losing out

Though demand for fabrics such as uniforms for school children, military, police personnel, as well as officials of paramilitary organisations across the country is swelling, Nigeria is obviously losing out in the global textile economy, especially to China.

Being the second largest employer of labour after the public sector, experts are of the opinion that the time is ripe for the Nigerian government to take a holistic approach towards reviving the country’s moribund textile industry that used to be the third biggest in Africa after Egypt and South Africa, CHIJIOKE IREMEKA writes:

As THE nation’s textile industry remains moribund due to a combination of huge infrastructural deficits and cheap imports from Asia and other parts of the world, there has been swelling demand for fabrics that can be used as uniforms for school children, military and police personnel as well as officials of paramilitary organisations across the country.

Clothing is a crucial element in the popular Maslow’s Hierarchy of Needs hypothesis. “Our need will be the real creator,” wrote a Greek philosopher, Plato, in the Socratic dialogue, Republic, which was moulded over time into the English proverb, “Necessity is the mother of invention.” This proverb implies that need is the driving force for most new inventions across the world. Hence, national need or problems spurs creative efforts towards meeting the need or solving the problem.

With the prevalent high demand for textile materials to meet the country’s need for clothing, especially uniform fabrics for a great number of private schools in Nigeria, it is expected that the government would take practical and solid steps to resuscitate the ailing textile companies to meet local demand and make a remarkable contribution to national economic development.

Stakeholders across the country are of the view that the rising demand for fabrics should spur the government to make policies that would turn around the fortune of one of the country’s employers of labour. Unfortunately, despite the growing demand for textile materials, it appeared there is no deliberate policy backed by the political will to resuscitate the moribund companies, including the United Nigerian Textile Limited (UNTL) in Kaduna, the biggest in the country and the third biggest in Africa after Egypt and South Africa.

Since UNTL became ailing, the Nigerian economy has witnessed an influx of foreign clothing materials from China, India, and Turkey, among others, to meet the country’s need for clothing, especially uniforms for schools, police, military and paramilitary organisations.

To a large extent, the growing demand for fabrics is a guarantee that the textile companies in the country, if revamped, would not scramble for the market for their finished products as the country has an overwhelming need for textile materials.

Some observers said that if resuscitated, the industry would contribute immensely to the country’s Gross Domestic Product (GDP), churn out job opportunities for millions of unemployed Nigerians roaming the streets in search of jobs and boost non-oil revenue that would put the national economy on the part of greatness again.

According to the National Bureau of Statistics (NBS), the number of unemployed persons in Nigeria increased to 23, 187 in the fourth quarter of 2020 from 21, 765 in the second quarter of 2020.

As of 2021, the number of unemployed citizens was estimated to be around 6.3 million. This increased from the preceding year when around six million people were said not to be in any form of employment.

Thus, resuscitating the textile sector is a task that must be done, especially when demand for the products is chasing dollars to procure these fabrics abroad for local tailoring and industrial garments manufacturing companies.

 
Stakeholders also said high demand for textile materials would attract investment to the sector and spur the manufacturing of more products. Necessity being the mother of invention is yet to play out in the textile sector in Nigeria, despite the growing need for the products.

The Central Bank of Nigeria (CBN) revealed that Nigeria spends a whopping $40 billion annually to import textiles and ready-made clothing, a situation described as a sneering development that should be urgently addressed.

The CBN governor, Mr. Godwin Emefiele, who spoke at the textile industry stakeholders meeting in Abuja, said Nigeria in the 1970s and early 1980s was home to Africa’s largest textile industry, with over 180 textile mills in operation, employing over 450, 000 workers.

“By today, if we had nurtured and encouraged the textile industry, that sector would be employing millions. The textile industry at that time was the largest employer of labour in Nigeria after the public sector, contributing over 25 per cent of the workforce in the manufacturing sector.

“This industry was supported by the production of cotton by 600, 000 local farmers across 30 of Nigeria’s 36 states. This sector supported the clothing needs of the Nigerian populace, as our markets were filled with locally-produced textiles from companies such as United Textiles in Kaduna, Supertex Limited, Afprint, International Textile Industry (I.T.I), Texlon, Aba Textiles, Asaba Textile Mills Ltd., Enpee, Globespin, Five Star and Aswani Mills, among others,” he said.

In spite of these textiles giants in the country, Nigeria lost out in the big business as some challenges in the past 20 years forced these companies to go under while other surviving ones have divested into other forms of businesses, including the importation of finished products and Completely Knocked Down (CKD) automobiles.

Some of them were faced with the rising cost of operations and weak sales due to high-energy costs, smuggling of textile goods, poor access to finance as well as bad economic and political policies of the government.

The Guardian learnt that Afriprint Company went into the importation of automobiles, computers and auto parts, including spark plugs, among others to remain in business. These companies have a lot of stories to tell about their divestment even as workers and their dependents are feeling the impact.

In an interview in 2011, the Group Managing Director of Kewalran Chanrai Group, owners of Afprint Plc., a textile manufacturing company along Oshodi-Apapa Expressway by Iyana-Isolo, now closed down as a result of numerous environmental and other difficulties lamented the situation in the industry, saying “Nigeria turned us into traders.”

In the said interview, he was quoted as further saying: “I have always said that the problems of the textile industry cannot be completely separated from the problems of the real sector. The real sector in this country is on the decline. Let me say upfront that the economy is growing, that is what we are told. But it is jobless growth.

“We have more people on the street today looking for jobs than we had 10 years ago (now, 22 years ago). This is because the real sector is shrinking. Why is it shrinking? It is purely because of the cost of production. When we are talking about the cost of production, people look at just power. But I want to bring this to the notice of Nigerians even if you fix power, what of the mode of transportation? This is one country in the world where you transport virtually everything by road. Who does that in other parts of the world?

“There is no way any government in this country would have good roads because of our climate, especially down south, where you have all the ports. You have to truck products up north and they go through these roads that are not constructed to take these heavy loads. So, if you look at it, we are losing at both ends.

“You also look at what we spend to generate our own power. For most of the companies in the private sector that did their projections earlier in the year, these projections are all totally thrown overboard. Most of them budgeted for the cost of diesel and black oil at a rate they thought they could manage, but today, it is almost double. It is gradually wiping out the profits of these companies.

“I say this to let you know that we cannot really compete. You can also not close your borders because we belong to the World Trade Organisation (WTO). All the bilateral agreements that we have signed, must obey. At the time textile was in production, say 17 years ago, greybaft, which is the base cloth that we print on, the one produced in Nigeria was costing us about 80 kobos per metre.

“The one coming from India was landing here with clearance and everything from the ports, with less than 50 Kobo. You can see the wide margin. Apart from that, there is also the cost of the cotton we were using. The government abolished commodity board about 30 years ago and cotton cultivation as well as other cash crops cultivation, with no standard, and no guaranteed price for the farmer, all of them went up.

“I think it was only about three or four months ago that the government came back to reinstate the commodity boards. If you look at the chemicals that we need for textiles, you will be shocked that most of them are by-products of petroleum. For you to make man-made fibre, you need a peculiar acid and things like that.

“The original design for our refining and petro-chemical plants was to produce these raw materials. Several years down the line, we are not producing. So, if you want to produce textiles, everything that you need to produce is imported. How can you compete?

“I have always said this too, I like to challenge my friends in the labour movement, the attitude of Nigerians to work is terrible. The Chinese today are coming out fast like India and the others. If you have worked with the Chinese, you will know that for them, work is a religion. They have a great attitude to work, but we do not have that.”

In 2020, textiles were the world’s 7th most-traded product, with a total trade of $774 billion. Trade in textiles represents 4.62 per cent of total world trade. Between 2019 and 2020, the exports of textiles decreased by -4.67 per cent, from $812 billion to $774 billion.

Also, in the same year, the countries that had the largest trade value in exports than in imports of textiles were China ($250bn), Bangladesh ($26.5bn), India ($23.5bn), Turkey ($19.2bn), and Vietnam ($18.6bn).

Nigeria imports more textiles than it exports. For instance, between 2018 and 2021, Nigeria imported textile products amounting to N279 billion, roughly $671.8 million. Compared to the other years under review, this was a considerable increase.

In the face of these challenges, observers lamented that there has not been any policy initiated by the government with genuine interest to revamp this sector in the past 20 years, except for their usual policies without political will. Their policies towards this sector were sometimes a conduit for corruption.

The Guardian’s investigation revealed that there were actually some interventions towards the resuscitation of the sector, but they failed. Under the former President Goodluck Jonathan’s administration, efforts were made to address some of the issues by placing a ban on the importation of textile materials, but like other trade restrictive policies, the ban failed to yield the desired results. The power sector, which was a major problem was not sine qua non for the sector’s resuscitation.

To many observers, despite the establishment of various funds running into about N300 billion, not much progress has been recorded in the revival of the ailing textile companies.

Former Vice President of the Nigeria Labour Congress (NLC) and General Secretary of the National Union of Textile Garment and Tailoring Workers of Nigeria, Issa Aremu revealed that over 38 firms benefitted from the funds and claimed that over 8, 000 jobs were saved, but the decay in the subsector appears to be increasing in spite of the release of funds by Federal Government agencies, including the Central Bank of Nigeria (CBN) and the Bank of Industry (BOI).

In 2020, for example, the CBN announced an N50 billion special mechanism fund for the revival of the ailing firms in the textile industry under the administration of BOI at a concessionary rate of 4.5 per cent, yet this has not brought any reprieve to the sub-sector, as expected.

With about 60 per cent of the funds already disbursed, according to BOI, the indications are that the more the funds are released, the more the textile and garment sector dies due to corruption. Hence, there is a need for a conscious and strong political will to address the challenges of the sub-sector.

In their work, The Nigerian Textile Industry: An Overview, in Nigerian Journal of Polymer Science and Technology, 2016, Vol.11, M.M Owen and C. O. Ogunle of the Department of Polymer and Textile Technology, Yaba College of Technology, Lagos said the nation’s textile industry had been brought to its knees by a combination of huge infrastructural deficits and cheap imports from Asia and other parts of the world.

The collapse of the industry, they said, was driven largely by smuggling at the borders, failed government policies, the high cost of doing business arising from high-priced raw materials, energy costs and other challenges which plague the investment climate in Nigeria.

They lauded the government’s intervention loan of N100 billion and even the fresh N255 billion investment in textile firms intended to revive the industry but stated that the injection of money is not enough.

“The problems in the sector definitely have gone beyond a mere financial provision. It is good to create funds, but it is better to create a sustainable enabling environment typified by low operating costs, availability of long-term funds from the banks and policy consistency to boost economic activity and facilitate job creation. What is paramount for the private sector is an investment climate.

“The initiation and enforcement of the right policy on the part of the government, availability of gas and Low Pour Fuel Oil for industrial boilers, curbing of smuggling, as well as solving insecurity, power/energy problem would go a long way to revive the textile industry for sustainable economic development,” Owen and Ogunle said.

Also, E.O. Orekoya of the Polymer and Textile Department, Federal Institute of Industrial Research (FIIRO), Oshodi, Lagos, said revival of the textile industry would require a strong political will, commitment and sincerity of purpose by the government.

“If all the problems affecting the industry can be tackled decisively and holistically, it will be successfully resuscitated for sustainable development,” he said.

TODAY, only a few of the textile firms in Nigeria are still in operation. With the government’s statistics that only seven textile companies are functioning below maximum capacity compared to what was obtained in the past, a lot needs to be done to salvage the situation.

In Lagos, those still around and struggling include Spintex Mills Nigeria Limited, Lucky Fibres Plc. and Nichemtex Plc. while major players across the country such as Nigerian Textile Mills, Aba Textile Mills, Asaba Textile Mills, Kaduna Textile Limited and others have either gone into extinction or are moribund.

In a recent editorial, The Guardian stressed the need for a strong political will to address the challenges of the subsector. The newspaper canvassed formulation of policies that would promote the use of made-in-Nigeria textiles and garments on all occasions as it’s being currently promoted in Anambra State under the leadership of Governor Charles Soludo.

Other suggestions include addressing the market access challenges of the local firms. Hence, the use of tariffs to checkmate the influx of cheap textiles from China and India, among others needs to be revisited. The provision of infrastructure, particularly energy supply, is crucial for the growth of the textile and garment subsector.

Issues relating to the macroeconomic policy environments such as exchange rate and price stability are part of the bottlenecks to be addressed in enhancing the revival of the subsector.

This, The Guardian observed should be in addition to the provision of security, which is currently a matter of great national concern to the country.