By Merit Ibe [email protected]
The deteriorating state of the nation’s textile sector and garment industry, despite substantial government financial interventions, continues to worry stakeholders and operators. Once a significant contributor to the manufacturing sector, this industry now finds itself in a comatose state. Its decline is especially troubling given its potential to provide employment for both skilled and unskilled labor, generate export earnings, and attract foreign direct investment, thereby reducing poverty.
Analysts express frustration that government efforts to revive the sector through fiscal policies and monetary interventions have not yielded the expected results. Observers are increasingly skeptical about the fate of the funds allocated for the sector’s revival, questioning whether these resources were mismanaged or never properly accessed.
Historically, the textile industry was the largest employer of labor after the public sector, playing a major role in the economy. However, it has ceased to be a significant contributor to foreign exchange earnings and employment in Nigeria due to several challenges. These include inadequate power supply, inconsistent government policies, rampant smuggling of foreign textiles, insecurity, and forex scarcity.
Industry operators assert that the challenges are multifaceted and call for strong political will, commitment, and sincerity of purpose from the government. They urge that Executive Order 003, which mandates government ministries, departments, and agencies to prioritize locally produced goods, be made efficient.
Joe Ajaero, President of the Nigeria Labour Congress (NLC), emphasized at a conference organized by the National Union of Textile, Garment and Tailoring Workers of Nigeria (NUTGTWN) that no nation can afford to neglect its textile sector due to its extensive value chain and potential for job creation. He recalled a time when the textile sector employed millions of Nigerians across over 200 companies, utilizing local cotton to produce various textile products for domestic use and export. Over time, however, the sector has degenerated.
“We have witnessed publicized efforts by past governments to resuscitate the sector, but it seems the louder the noise about revival, the more the sector declines,” Ajaero said. He pointed out the N100 billion and the recent N50 billion Textile Revival Implementation Committee (TRIC) funds, questioning whether these resources were effectively utilized.
Despite promises by the Minister of Industry, Trade and Investment, Doris Uzoka-Anite, that the Federal Government is developing a resurgence plan for the cotton, textile, and apparel industry in collaboration with development partners and the private sector, tangible progress remains elusive. While reviewing the ministry’s activities over the past year, Uzoka-Anite noted that about $3.5 billion in investments were secured to rejuvenate the moribund sector. Yet, the sector remains stagnant.
John Adaji, immediate past president of NUTGTWN, stressed that reviving the sector requires deliberate government efforts. He cited South Africa’s successful “Buy South Africa” campaign, which revived its textile sector and created jobs. Adaji believes that full implementation of Executive Order 003 could significantly boost Nigeria’s textile industry.
Ilyasu Saleh, Chairman of the Textile Group of the Manufacturers Association of Nigeria (MAN), identified several issues plaguing the sector. He noted that a large percentage of textiles sold in the country are smuggled and imported, resulting in a loss of potential Value Added Tax (VAT) revenue. The suspension of Export Expansion Grant (EEG) claims has further compounded the problems, limiting operators’ capacity to export and improve production.
Saleh criticized the lack of compliance with Executive Order 003 and highlighted the preference for imported goods over local products. “Operators are selling below production costs, which is unsustainable,” he said. He pointed out that government agencies and the armed forces no longer buy from local manufacturers but import from China, exacerbating the industry’s woes.
“The cost of doing business is very high due to lack of forex, inadequate local production of raw materials, and high energy costs,” Saleh explained. He also highlighted the impact of insurgency on cotton production, leading to higher costs and reduced profitability for local manufacturers.
Layo Bakare-Okeowo, CEO of FAE Limited, appealed to the government to protect the local textile industry from the influx of imported materials. She emphasized the need for fair gas pricing for manufacturers and highlighted the potential for exporting local designs like batik and adire. Bakare-Okeowo also stressed the importance of security for farmers, as the major raw material for the sector, cotton, is endangered by terrorism.
Frank Onyebu, former Chairman of MAN’s Apapa branch, criticized bad policies and lack of protection that have frustrated the garment industry over the years. He believes that with the right policies and proper implementation, the sector can be revived.
Daniel Dickson-Okezie, Chairman of the SMEs Group of the Lagos Chamber of Commerce and Industry (LCCI), pointed to poor local patronage and lack of transparency as major hindrances to the industry’s growth. He called for a high level of patriotism and government-led encouragement for Nigerians to buy local products. Dickson-Okezie also highlighted multiple taxation, epileptic power supply, and insecurity as obstacles to the ease of doing business in the textile industry.
In summary, stakeholders urge the government to fully implement Executive Order 003, tackle insecurity, support local cotton production, and encourage patronage of locally made products to revive the textile sector. They believe that with concerted efforts and the right policies, the industry can regain its former glory and contribute significantly to the nation’s economy.
MAN seeks FG’s protection of local investors
The Manufacturers Association of Nigeria (MAN) has called on the Federal Government to prioritise the protection of local investors and actively take steps to improve the operating environment for manufacturers and other economic operators to thrive.
Expressing grave concern over the allegations of poor-quality diesel levelled against one of the largest private investments in Africa, the Dangote Refinery, by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the association urged caution among major actors, government agencies, and regulators in the oil and gas sector.
Segun Ajayi-Kadir, Director General of MAN, emphasized that government agencies responsible for regulatory oversight should foster an enabling business environment for local investments. He stressed that no regulatory agency should undermine a homegrown investment like the Dangote Refinery. “The allegations of poor quality, monopolistic tendencies, and non-issuance of licenses have since been roundly debunked. There may then be a need to issue a clarification that absolves the Dangote Refinery of the negative perception generated by the news report.”
Ajayi-Kadir further highlighted the crucial role of local investors like Dangote Industries Limited (DIL) in driving economic growth. The company pays taxes, creates jobs, and fosters development within the country. “As such, it is important that these investors are protected and given the necessary support to thrive in this business environment.” He underscored that a business titan like Aliko Dangote, with investments across diverse sectors and the continent of Africa, deserves all necessary support to grow and invest in more sectors, positively impacting the wellbeing of the people.
“There is no gainsaying the fact that Dangote Refinery is deserving of government protection and support. Located in Lagos, the largest single-train refinery in the world, it will play a significant role in reducing Nigeria’s dependence on imported petroleum products, reduce costs and energy poverty, and significantly boost our energy sufficiency. This is also a company in which Nigeria and Nigerians are shareholders. We should never encourage or promote a preference for imported products over local alternatives. This amounts to importing poverty and exporting prosperity.”
He lamented the multifaceted challenges faced by the manufacturing sector, including high electricity costs, high regulatory compliance costs, lack of access to financing, unfavourable foreign exchange rates, and unfair competition from imported and smuggled products. He noted that it is imperative for the Nigerian government to take proactive steps to address these binding constraints to improve the competitiveness of local industries and enhance their contribution to the GDP.
“Local investors are not only drivers of economic growth but also champions of national development. They mirror our national industrial aspirations, and their wellbeing attracts both local and foreign investors. There is hardly any major foreign investor that would be encouraged to invest in Nigeria by the recent unwarranted castigation of Dangote Refinery. On the other hand, supporting and protecting local investors like the Dangote Refinery would send a clear signal to foreign investors to take advantage of the conducive environment and invest, thereby creating jobs and building a more prosperous future for our people.”
The association therefore calls on the Nigerian government to prioritize the protection of local investors and actively take necessary steps to improve the operating environment for manufacturers and other economic operators to thrive.