Nigeria’s textile industry is now gasping for breath following the failure of revival measures, a sustained upsurge in the importation of textile products and a series of adverse monetary policy regimes.
Recall that Nigeria had a rich history of robust textile manufacturing with a large domestic market along with exports to the West Africa sub-region between 1970s up till 1990s, recording the highest contribution to Nigeria’s Gross Domestic Production (GDP) and employment in the manufacturing sector.
The sector had recorded about 180 textile mills employing over one million direct labourers at its peak around 1990. It also supported huge backward integration with the cotton production value chain during the period.
However, reporters findings indicated that decline had set in around 2005 and it had struggled since then despite the growing market size due to the rising population.
Newsmen also learnt that only about five textile mills are still operational today while the cotton production value chain has vanished. The labour force is also down to less than 2,000, both direct and indirect.
Industry stakeholders have attributed the collapse to challenges including large-scale smuggling and importation, little or no power supply to the industry that is power-intensive, inconsistent government policies on tariff, insecurity across cotton production regions, and foreign exchange crises and high cost of funding which made the products uncompetitive in the face of huge imports.
Failed revival efforts
Despite the federal government’s efforts to revive local production through protection policies, the country’s textile industry has continued to struggle, leading to an upsurge in textile imports over the years.
As part of the revival measures, the Central Bank of Nigeria (CBN) has implemented various intervention programmes, including financial support, training initiatives, and foreign exchange restrictions on textile imports at the official exchange market. But all these have not yielded the required boost in the sector.
Data obtained from the National Bureau of Statistics (NBS) from 2019 to 2023 revealed a steady rise in textile imports.
Total textile trade within the period was N1.5 trillion, with imports totaling N1.4 trillion, representing 96.5 percent, while exports amounted to N50.7 billion (3.5 percent), indicating total textile trade deficit of N1.384 trillion and highlighting a significant reliance on imported textile products.
In 2019, NBS reported that N220.5 billion worth of textile products were imported into the country; N182.5 billion in 2020; N278.8 billion in 2021, and N365.5 billion in 2022.
Read Also: FG faults US lawmakers’ claim on Binance chief’s health
Despite the foreign exchange crises the figure still went up further to N377.1 billion in 2023.
On the other hand, textile exports, mostly cotton and apparels, within the period was N3.3 billion in 2019; N6.0 billion in 2020; N12.3 billion in 2021; N10.3 billion in 2022; and N18.8 billion in 2023.
The rise was mainly in Naira terms following depreciation of the local currency year-on-year, as USDollar terms, the export value declined steadily.
In the first quarter of 2024 (Q1’24), NBS also reported that of the N186.94 billion total trade value of textile products, imports value stood at N178.45 billion (95.5 percent), while exports amounted to only N8.49 billion (4.5 percent), indicating a deficit of N169.96 billion.
The decline in import also marked a huge impact of exchange rate and the general economic downturn during the period, according to the industry stakeholders.
