It a cursory glance, the ailing textile industry appears on a steady but slow walk from a recession to a rebound. In a way, this glad tiding should call for celebration among the teeming Nigerians who lost their jobs to the collapse of the subsector. At least, that is the sweet music being played for the public by some stakeholders in the industry, especially government officials. The expectation cannot be less. With a N100 billion textile revitalisation lifeline, which scores of comatose textile firms have benefited from in terms of soft loans administered by the Bank of Industry (BoI) at single digit interest rate, there is optimism that the industry, which formerly employed the highest number of hands within the manufacturing sector, will be stirred into buoyancy it lost many years ago.
BoI’s Managing Director Ms Evelyn Oputu wants Nigerians to believe that the beleaguered textile industry will start witnessing a rebirth soon. After supervising the disbursement of the textile revival fund to about 50 textile firms, Ms Oputu indeed has enough justifications for her optimism. To avoid fraud, the BoI worked with each beneficiary to deploy the lifeline into servicing whatever the beneficiary claimed as his or her utmost need.
While stating that about 60 percent of the N100 billion has been disbursed to some beneficiaries, she exuded confidence that the lifeline is already yielding results, including recreating 25,000 jobs and raising some textile factories from the dead. “The Nigerian textile industry is bouncing back and will soon explode.
“Nigeria, like other African countries, is facing infrastructure deficit. By the time we completely address the challenges of infrastructure like power and transportation, you will see the rate at which we will be moving. The railways have started, and we are also addressing power. So, in a no distant future, we will start seeing the small and medium enterprises fully back in place and moving.”
Also recently, a picture of rosiness was painted by the Minister of Industry, Trade and Investment Olusegun Aganga, who said the fund has given the textile industry a new lease of life. According to the minister, the collapsed subsector is no longer on crutches, as the revival fund has helped revamp many companies in the industry, raising the capacity utilisation in the subsector from 29 percent to 52 percent.
Aganga said: “Besides the cement industry, the textile industry has been revamped through the Bank of Industry-managed Cotton, Textile and Garment (CTG) Industry Revival Fund Scheme that disbursed loans to about 50 textile companies at six percent interest rate. Recent findings show an encouraging impact as figures from the Manufacturers Association of Nigeria (MAN) reveal that some ailing textile mills have been revitalised, leading to 8,070 jobs being secured and 5,000 ones created.”
However, beyond the façade of empty optimism and scanty impact of the fund lies an industry that is still gasping for breath, as it is steeped in monumental decay that can condemn it into outright extinction. The situation report in most of the textile firms is not impressive, as most textile firms in the North and South are still moribund; only a few exist on skeletal operations. What then informs the optimism of Aganga and Ms Oputu? According to textile manufacturers who spoke with The Nation, it is either government officials underestimated the rot in the subsector or they are deliberately playing politics with it for political ends. The situation, as investigations reveal, portrays a textile industry that is still in the throes of neglect. Sadly, this precarious situation is the same for both textile firms that accessed the fund and those that did not; for what they seem to have received from government is a lifeline without the much-needed rescue, leaving the industry as vulnerable as ever. Here is how.
Industry, still a swan song
Although Adhama Tex
tile and Garment Industry
Limited, located in the ancient city of Kano, is fortunate to have benefited from the revival fund, everything around the company evinces a tale of an empire that has fallen from grace. Right from its entrance, telltale signs of a glorious past are as palpable as the surf on the beach. While its premises are yet to be taken over by weeds like many others in the vicinity, the aura inside the ailing textile firm is bound to leave visitors with an unmistaken message that it has seen better times. At every turn in the sprawling edifice, rusty tools, dusty furniture as well as disused machines assail the eyes, as the ageing facility struggles to bounce back to life it once enjoyed. At the height of its buoyancy, Adhama’s staff strength rose to 335 from a modest 19 hands at inception in 1978 before recession set in, leaving its fortune plummeted.
However, the textile revival initiative by the Federal Government has made Adhama richer by a few new machines, more modern than its old stock. Somehow, this generosity of government has also catapulted the embattled firm to a position to provide gainful employment to 24 Nigerians. But, the bad news is that both the old and new machines in the factory are practically lying fallow, gathering dust as a result of low patronage. This has forced the 34-year-old factory, which used to load at least one truck of textiles to Aba and Onitsha daily, to barely survive on skeletal operations.
“The government is investing money and I am one of the beneficiaries of the revival fund of Bank of Industry. I bought all the machines in my industry, yet I can’t employ people. I have the capacity to employ 1200 Nigerians but now I am able to employ only 24. I am also faced with the challenge of training people because we have lost all our skilled workers,” said Saidu Dattijo Adhama, founder of Adhama Textile and Garment Industry Limited.
But, Adhama is obviously not alone in this grace-to-grass story. In fact, the tragedy of its fall pales when compared with more debilitating fate that has befallen many of its neighbours, many of which have since packed up due to inclement economic climate.
While the ailing Adhama still operates at less than ten percent of its installed capacity, Gaskiya Textile Mill, sited within the same estate in Kano, cannot afford such a luxury, for it is long dead and buried, remaining only its carcasses and large premises that have yielded space to overgrown weeds. Now, the company that once enjoyed a huge reputation for churning out fabric materials of exotic quality has been torn into smithereens, having to battle litigation issues with its former employees who claimed it unilaterally shut down operations without settling their outstanding salaries and allowances. In a suit instituted against the management of the firm, the National Industrial Court ordered it to pay N128.3 million to its former workers and the National Union of Textile, Garment, and Tailoring Workers of Nigeria (NUTGTWN) as gratuity and union dues. By this judgment in April 2013, the industrial court, presided over by Justice F. L. Kola-Olalere, merely upheld the 2010 ruling by the Industrial Arbitration Panel, which had earlier said the management of the company was wrong in unilaterally closing shop in 2005 without paying the entitlements of its disengaged workers.
That is just a tip of the iceberg. While Gaskiya is no longer able to produce clothes for Nigerians, it burdens them with migraines, as its premises housing dilapidated buildings have since become a sanctuary for criminals and religious extremists who terrorise the populace, maiming and killing innocent souls. Unfortunately, things do not fare better in the neighbouring Kaduna, capital of Kaduna State, which is home to a huge concentration of textile companies that used to produce top quality textile materials for the country and many parts of West Africa at some point. Here, all the textile companies that formerly employed about 300, 000 hands are practically dead, except two that still run skeletal operations. One of the big players in the sector back in the good old days is Kaduna Textile Limited (KTL), owned jointly by all the 19 northern states. Established in 1957 by the late premier of the defunct Northern Region, Sir Ahmadu Bello, KTL was a beehive of activities in its apogee, with over 9000 workers on its pay roll before it was hit by a wave of recession that gripped the industry, forcing it to close shop in 2002.
Today, the expansive building of KTL is desolate, while gigantic machines in the premises have decomposed, with reptiles and domestic animals having become the new landlords in a once flourishing manufacturing company. Now, instead of giving employment to thousands of Nigerians, KTL has plummeted to become a source of headache to residents of Makera and Kakuri areas of Kaduna where it is located, as hoodlums that have found a safe abode in the moribund company now terrorise the neighborhood. Although entreaties to the 19 northern governors have yielded the constitution of a five-governor committee, headed by Governor Abdulfattah Ahmed of Kwara State, to explore the modality for reviving the factory, the woes of former workers continue to worsen. And as if to sound a death knell on the company, a criminal gang known among the locals as “KTL thieves” is busy making illegal fortune from vandalising and looting its property since the closure of the textile company.
Since their closure in September 2003, workers in both Northex and Finetex Limited have also gone up in arms against their employers over unpaid salaries and terminal benefits, amounting to N305, 653,887 as gratuities, N63, 433,190 as outstanding salaries, and N7.6million as outstanding union dues. After legal fireworks that lasted more than eight years, a out-of-court settlement seemed to be yielding fruits as principal shareholders of the two firms, especially Alhaji Aminu Dantata, have started paying the N250 million agreed on in installment. It was also gathered that the two firms may roll out their plans for revival any moment from now.
The fate of textile firms in Lagos is not any better. Although some operate on far below their installed capacity, many of the big industry players have bowed out of the fabrics business; they have either leased their premises to other concerns or divested to other interests. For instance, Aswani Textile has leased its premises on the Oshodi Apapa Expressway in Lagos to Chellarams Plc, makers of full cream instant milk- Real Milk; Churchgate leased its premises to a church. Afprint has divested into manufacturing of edible oil, cars and IT gadget merchandise; Enpee Industries Plc has become a packaging industry. Others have turned their attention to manufacturing of household items, such as soaps and detergents. Today, if information is sketchy as to how and whether these firms intend to come back into textile business, there is no disputing the fact that there is no textile firm in the country that is operating at full installed capacity.
A catalogue of woes
In time past, the country’s tex
tile industry was hailed by all
and sundry as the single largest employers of labour in the manufacturing sector, earning it the sobriquet of the pride of an emerging nation. At the height of the industry’s influence, especially in the late seventies and eighties before the military forced the pungent pills of the ruinous Structural Adjustment Programme (SAP) down the throats of Nigerians, findings show that functional textile mills in the country numbered above 200. Jointly, they employed about ten percent of the population. Not only was the nation inching towards attaining its dream of being able to clothe its citizens, the industry that has now been reduced to a shadow of its old ebullient self once accounted for an estimated 60 per cent of the textile capacity in West Africa. In those days, the giants of the industry, such as United Nigerian Textile Company, Aswani Textile, Afprint Nigeria Plc and many more, were bubbling with life and production, churning out acceptable fabrics of international standard. Pronto, fakes started to infiltrate the Nigerian markets due to porosity of the nation’s borders, setting the industry on a spiral decline that is yet to be fully addressed.
Over the years, especially in the last one decade and a half, the fortunes of this important industry have continued to plummet while stakeholders keep mouthing ideas as how best to salvage it from total extinction staring the subsector in the face. According to employers in the nation’s beleaguered textile industry, what has brought about their tales of woes is a long list of problems: smuggled textiles particularly from Asian countries have exerted excruciating pressure on local production and currently account for over 85 per cent of the market share; obsolete equipment which the revival fund is helping to address; unbridled importation, that allows for dumping of highly subsidised alternatives into the Nigerian market; counterfeiting of Nigerian textile products; dearth of technical manpower; inconsistency in government policies and perennial electricity outages which the Federal Government has not been able to solve over the years. According to Suleiman Umar, managing director and chief executive officer of Tofa Textile Limited, Kano, all the above factors have combined to snuff life out of the industry. “The industry is in serious problems. If you factor in the decline it has witnessed over the years, the industry is almost nonexistent compared to the past. The existing companies are operating below installed capacity, while some even produce seasonally. Before, the focus of government was on the manufacturing sector. But now, it is on foreign direct investment. They make statements that the economy is growing, but when you go down to the real manufacturing sector, it is not. The problem of multiple taxation is there. If you move your textile materials say from Kano to Lagos, every state on the way will ask for one tax or the other. By the time you get to Lagos, your production cost has increased significantly,” Umar, whose company is into manufacturing of blanket, complained.
While assessing the impact of the revival fund on the industry, Umar and Adhama are of the view that patronage, not lifeline, is what the manufacturers require to be in business. According to them, many of their colleagues who have accessed the revival lifeline have since come to the realisation that production without patronage is meaningless, if not a recipe for further disaster that may plunge the industry into more chaos.
He said: “The companies that got the revival fund have merely bought themselves more time. They will come back to the same thing. The fund is a good idea, but when that scheme was created, it came with a lot of promises. They said money will be given, but there will also be other incentives like tax holiday and so on. There were promises of zero duty on your goods that are coming and so on. They banned importation of textiles at that time, but that ban has been lifted without putting in place any incentive for the local industries. Because all these things involve many ministries, there are always inconsistencies on the part of government. Maybe there is lack of agreement between the ministries, one does its own and the other does its own, which is always counterproductive.”
Jaiyeola Olarenwaju, director general, Nigeria Textile Manufacturers Association, said the fortunes of the industry have not really improved much, except that the rate of closures and redundancies has gone down lately. “Currently, the level of closure has gone down drastically and the idea of retrenchment, redundancies are not very common now as it used to be,” he said, adding that the association has less than 30 members now. Ibrahim Igomu, national chairman, Textile Manufacturers Association, echoed a similar view, saying the revival fund cannot lift the industry from its current state unless other problems affecting patronage of local textiles are addressed.
Jaiyeola said: “In those good days, we employed between 250,000 and 300,000 workers but now we have less than 25,000 workers in the industry. We had factories in Onitsha, Asaba, and Aba. As at today, we have no factories in those places again. Like what we have in Port Harcourt now where a member is producing propylene bags. In Aba, we have somebody producing mosquito net, T-shirts and all the rest of that. That is all that we have from that part of the country; so it is bad as that.”
The industry after the lifeline, says Mrs Ghada Sulaiman, Managing Director of African Textiles, Kano, is still enmeshed in challenges, which she sttibuted to unchecked invasion of foreign textile materials.
“The industry is down and it needs more than just the effort (lifeline) to get back on stream. We are not capable of printing competitive materials that can compete with foreign materials that often come cheaper. The operating environment has not put us in a situation to compete well,” she said.
However, Isa Aremu, the
General-Secretary, Na
tional Union of Textile, Garment and Tailoring Workers, commended the BoI and government for the intervention effort in the sector, noting that though it came late, it was better as many firms had been revived.
“When the textile industry was still vibrant, a single firm could generate about 10,000 jobs. However, due to the intervention fund, we have been able to revive some firms. There is a need for an accelerated growth in the sector and this can be achieved through increased funding to the sector. A drop in interest rates for the real sector will foster its growth. I believe we can work towards a zero per cent interest rate if we set our mind towards it,” he said.
He said while 58 companies are managing N100 billion textile revival fund, AMCON has spent about N5.6 trillion on rescued banks, stating that same gesture could be replicated in the real sector if the desired growth and employment generation is to be achieved. He, therefore, urged the BoI to increase the tenure rate for loans sought by firms in the real sector in order to aid attractiveness of the loans to the companies and foster development.
Unless and until all these areas are addressed, stakeholders say it is apparent that there is a long hill to climb before local textile manufacturers can beam with easy smiles that the glorious days are back.
