The textile industry was once a thriving sector, producing at over 63 per cent of installed capacity and meeting the demands of the country and those in the West African sub-region. At its peak, it had 175 functional mills that employed over 800,000 workers. Today, the story is abysmally different. Only 25 mills are working with 24,000 workers. To reverse the trend, the Federal Government injected N100 billion into the sector, under a Textile and Garment Development Fund to assist primary producers, textile manufacturers and other operators. However, the future of the industry is as bleak as that of yesteryears Okwy Iroegbu-Chikezie reports.
At a time, the textile industry was considered the easiest place to get a job. It was the sector that employed the most with about 800,000 workers.
Realising the sector’s place in job creation, the Federal Government in 2009 proposed a N70billion lifeline for it. The amount was later raised to N100billion.
The N100billion Textile and Garment Development Intervention fund raised hope of the sector’s revival. The late President Musa Yar’Adua, who announced the scheme in 2009, described it as the most comprehensive for reviving a sector that was once the second highest employer after the government.
A fundamental feature of the scheme was that it covered the cotton and garment production value chain, which had not been accorded attention and yet was the most lucrative segment of the chain.
Justifying the scheme, the government noted that in the 1980s, the sector generated turnovers of about $9 billion from 175 mills, employing more than 700,000 and accounting for 25 per cent of manufacturing value-addition.
It regretted that by 2008, the country barely had 24 mills, employing no fewer than 25,000 workers, and accounting for about five per cent of manufacturing value-addition.
It said based on its assessment and those of leading firms in the industry and some development partners, the cotton, textile and garment industry stands out as a potential growth area of the economy that could propel the country towards achieving the Vision 20:2020 and the Millennium Development Goals (MDGs).
The expectations that greeted the intervention fund, evaporated almost immediately the scheme took-off. A motley of challenges still dug the sector, erazing the gains recorded under the scheme.
Stiff competition remains the order of the day. Although fabrics dot the markets and high-brow shops, none of them is of local extraction. They are all imported stuffs. Most of the local manufacturers have gone under due to unhealthy operating environment occasioned by poor infrastructure, multiple levies and multiplicity of regulatory agencies. The few indigenous manufacturing companies exist only in name.
The hope of restoring the job potential in the sector remains a pipe dream, while the economy remains a feedstock for foreign firms, thus creating jobs for other nations who find the market a veritable ground for the dumpming of their of products.
Minister of State for Industry, Trade and Investment Dr. Samuel Ortom told The Nation that the government is committed to the revival of the sector, saying that was what led to the setting up of a committee to take a fresh look at the textile sector. He said the committee would soon present its findings to the Economic Management Team and the Federal Executive Council (FEC).
He said: “The sector has the capacity to provide four million jobs. We have met with all stakeholders in the sector, including the Ministries, Departments and Agencies (MDAs). Our target is to produce high quality locally manufactured textiles and discourage the importation of cheap and substandard textiles.”
He said it is part of the government industrial revolution plan of the administration where ailing industries are revived and new ones established.
Ortom said part of the bigger picture is the provision of infrastructure, such as the on going road construction across the nation, electricity and the modernisation of the railways.
He said his ministry is running a campaign on the patronage of made-in – indigenous goods, especially textiles, exemplified with most of the cabinet ministers wearing it on public outings. He said the government has also improved on its rating and ease of doing business from 127 and 137 in 2011 to 115 and 131.
Ortom said as a result of deliberate government’s policy, over 17 million medium and small scale industries, employing 34 million people are thriving. He underscored Federal Government’s commitment to boost the textile industry by also encouraging local cotton farmers and the petrochemical industries.
Stakeholders, who spoke to The Nation, argued that as good as the bailout might be, the failure of the Ministry to provide evidence of how the massive fund infusion has so far aided the recovery of the industry raises serious doubts about the government’s strategy, to date.
The Central Bank of Nigeria said the Federal Government dished out bailout worth N500 billion in 2010 to the manufacturing sector, including the textile sub-sector, but that no appreciable result has been recorded so far by operators, igniting doubts if indeed the funds injected into the sector got to those who need it most.
The Director-General, Lagos Chamber of Commerce and Industry (LCCI) Muda Yusuf said the problem of the industry is a reflection of the problem of the industrial sector.
He said: “The manufacturing sector has very serious issues of competitiveness arising from the high cost of production arising from the challenge of poor power generation, logistics and funding. These three principal factors have made the textile industry uncompetitive. We are in a global world and if your cost of production is about 50 per cent higher than the cost of production elsewhere, then your chances of survival will be very limited.”
Yusuf said the various government interventions on the sector, such as the textile intervention fund worth billions of naira and campaigns for people to wear made- in- Nigeria textile but unfortunately because of the competitiveness problem, the local industry cannot cope.
He said there is a huge market for African fabrics, but almost 80 per cent, or more are smuggled into this country from the neighbouring countries, so that is the tragedy of the industry and the lesson is that when you have such problems, it is not enough to throw money at these problems like the kind of intervention fund that the government has thrown in.
He noted that the fundamental issue is that the sector itself has to be competitive which can only be achieved by removing obstacles to competitiveness. He frowned at the high cost of diesel and the epileptic power situation which is ‘killing local industries.
He said: “The other tragedy is that many of the textile firms are also running on obsolete technology which cannot meet the enterprise.”
On the implications of the high cost of production in the sector, he maintained that it has become cheaper for people to smuggle textile or even import from China or other Asian countries, adding that almost 80 per cent of the African fabric in the markets are smuggled and this a major tragedy of the economy.
The irony of the nation, he said, was that it has a large domestic market with very weak domestic production capacity.
According to him, most of what we consume locally are not produced by us because of our taste for imported products and weak government policies and agencies in addition to our porous borders that support smuggling.
He said: “What is happening with the manufacturing industries is happening with the downstream sector too. Almost 100 per cent of the fuel that we consume is imported yet we are an oil producing country; it is a major tragedy. The opportunities are there for jobs to be created but because we don’t have what it takes to produce competitively. We are not in a position to take advantage of the opportunities that the economy provides for our people.
‘’Nigerians are very enterprising given the right environment we can do a lot to transform this economy. But the environment has not been very conducive and that is why we have this kind of challenge that we have that the whole economy has been flooded with foreign products.’’
He argued that when the citizens have issues with their pockets, the first thing they think about is what they can afford not what they like; so we have a situation where that is the general mind-set making it possible for people to bring in cheap things that sell fast, he added. He urged government to patronise locally produced textiles.
He said: “For instance if we have a situation where there is a legislation that uniforms of men of the Armed Forces, Police, Immigration, the Prison Service, the Custom, Quarantine, the Civil Defence Corps, nurses and doctors and who wear uniforms in this country will be made from locally produced textile materials; that alone will be enough to keep our textile industry busy throughout the year.’’
