With the injection of N100bn Intervention Fund into the textile industry by the Federal Government through the Central Bank of Nigeria, CBN, stakeholders have hailed the development, saying it is a move in the right direction that is capable of reviving the sector, though, some salient questions remain. Babajide Okeowo in this report takes a look at an industry that was previously a behemoth, how it crashed and the latest effort towards reviving it.
Between the 1950s and 1980s, the textile industry in Nigeria was a major foreign exchange earner and one of the biggest employers of labour. The sector was once the hub of Africa’s largest textile industry, with over 180 textile mills in operation and employing over 450,000 people and accounting for over 25 per cent of the workforce in the manufacturing sector. In fact, the Nigerian textile industry grew to become the third largest in Africa, according to a United Nation’s report.
Then, companies like the Kaduna Textile Mill, Sunflag, Asaba Textile Mills Ltd., Enpee, Afprint Nigeria Plc., Aswani Industries Plc., Nigerian Textile Mills Plc., Texlon, Aba Textiles, Specomill Textiles Limited, Ijora Textiles and Materials Mills Ltd., and Bhojson Industry Plc. held sway.
That was before the doomsday. Today, the textile industry is living in the shadows of itself, as virtually all the companies had shut down and thousands of jobs lost, making the country a major importer of clothing and textile products.
It is further estimated that over $325 million was being lost in annual revenue to government through the importation of textile materials.
Years of maladministration and policy inconsistency on the part of government, especially the inability to provide infrastructure and conducive environment to retain as well as attract more investments into the sector had further strangulated the textile manufacturing economy. All past and recent efforts by successive administrations to revive the textile industry had only been more of paying lip service to a major economic matter, leaving the resuscitation of the sector in a state of dilemma.
To underscore the severity of the issue, CBN Governor, Godwin Emefiele, lamented that the last 20 years had been “very difficult” for many textile firms, which had faced rising operating cost and weak sales due to high energy cost, smuggling of textile goods, and poor access to finance.
In his words, “many of the textile industry employers have had to lay off employees while most factories have all stopped operations, leaving only 25 textile factories in operation presently- and operating below 20 per cent of their production capacities with a total workforce of fewer than 20,000 people.
With the death of these industries, came a rise in unemployment, insecurity and other negative social vices. “In addition, the cotton-growing sector has gone dead, thereby depriving thousands of smallholder farmers the opportunity to earn a living. Furthermore, a large proportion of our clothing materials are imported from China and countries in Europe. By today, if we had nurtured and encouraged the textile industry, that sector will be employing millions,” he said.
FG, CBN to the rescue
To stem the rot, the Federal government through the Central Bank of Nigeria, CBN rolled-out series of initiatives. First on the list was a directive from the CBN excluding all importer of textile material from having access to foreign currency in the Nigerian foreign exchange market. “Effective immediately, the CBN hereby places the access to Foreign Exchange, for all forms of textile materials on the FX restriction list,” Emefiele had announced.
He also revealed that the CBN would craft adequate measures to deal with the menace of smuggling, which had often threatened efforts towards self-sufficiency. According to him, CBN will make life difficult for smugglers.
Emefiele further reeled out an array of CBN initiatives targeted at restoring the lost glory of the textile industry by disclosing that there would be financial intervention to textile manufacturers with the provision of funds at single-digit rates. The textile firms, he added, will also refit, retool and upgrade their factories to enable them to produce high-quality textile materials for the local and export market.
And last week, Emefiele revealed that the apex bank is ready to release a total of N100 billion (one hundred billion naira) to revive the textile industry in Nigeria.
He spoke during the signing of two Memoranda of Understanding, MoUs between the National Cotton Association of Nigeria (NACOTAN) and Ginning Companies and the Nigerian Textile Manufacturers Association. The agreement was sealed under the Cotton, Textile and Garment Industry Resuscitation Project.
The MoUs will see the ginning companies buying off cotton produced by farmers while textile manufacturers will supply materials for the production of uniforms by Nigerian uniformed forces.
The CBN has also granted nine ginneries access to N19.18billion loan to retool their processing plants while providing them with improved access to finance at a single-digit interest rate.
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Emefiele’s declaration for the textile industry was highly commended by stakeholders, particularly the CTG Association President, Mr. Dani Dahiru, who predicted better days following the CBN’s intervention programme.
The apex bank boss noted that the country currently spent over $4 billion annually on imported textiles and ready-made clothing.
He said as part of its Anchor Borrowers Programme (ABP), the apex bank would also support local growers of cotton to enable them to meet the needs of the textile industries in the country.
Emefiele also said that the CBN would support efforts to source high-yield cotton seedlings “to ensure the yields from our cotton farmers meet global benchmarks.”
He further pledged that regarding the provision of stable electricity; the CBN would support the creation of textile production centres in certain designated areas in the country where access to electricity shall be guaranteed.
The CBN governor pointed out that with a projected population of over 180 million, the needs of Nigeria’s domestic market are huge and varied, with immense prospects, not only for job creation but also for the growth of the domestic textile industries.
He explained: “One quick example that highlights the potential of this local market includes the need to support the provision of uniforms and clothing apparels for school students, military and paramilitary officers as well as workers in the industrial sector. In addition, when we consider the amount spent on outfits for religious and social events such as weddings, naming and funeral ceremonies weekly, the potential market size is well over $10 billion annually,” he said.
Government should be commended –Stakeholder
A key stakeholder in the sector has commended the federal government over its move to revive the sector.
According to Mrs. Grace Adereti, The President of the Nigerian Textile Manufacturers Association (NTMA), in an exclusive interview with The Nigerian Xpress, the Nigerian government should be commended on its commitment to revive the textile industry.
“The government should be commended for what they are doing now, they are trying. If what the government is doing now has been done in the past, perhaps, the textile industry would have been revived. They have started with the most important aspect of the textile industry which is the planting of cotton, because if we have very good cotton, we will have very good yarn, then the spinning industry will be able to spin and the impact will be felt all along the whole value chain, so, they are doing very well,” she said.
Speaking further, she said the mindset of the government in reviving the textile industry is to create employment.
“The mindset of government is to create employment and it is highly commendable. The president in his wisdom thought that the textile industry, if revived, could be a great employer of labour and this is why the CBN is pumping in so much money through revival loans, etc. The CBN Governor is also very passionate about the revival of the sector,” she said.
Controversies still subsist
Despite concerted efforts by the Federal Government and CBN at reviving the sector, some lingering crisis still remains. Stakeholders have opined that one of the greatest obstacles to resuscitation of the Cotton Textile Garment, CTG sector is policy inconsistency by government.
For instance, in 2017, the Federal Government announced plans to institutionalise the patronage of locally made products among its ministries, departments and agencies (MDAs).
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Follow up to that decision, government agencies, particularly the security services departments including the military, police and paramilitary were ordered to henceforth procure uniforms from local manufacturers.
It is gathered that till date, the directive had been flouted by agencies, which still import their garments from overseas countries, a situation which further defeats the diversification attempts by the current government.
More worrisome is the alleged recent MoU signed between the government and a Turkish firm to manufacture all military and other paramilitary uniforms. It was gathered that MoU to ensure the establishment of a military and paramilitary clothing factory in Kaduna was signed with the Turkish firm, Sur Corporate Wear, in Abuja a few weeks ago.
The Minister of Defence, Bashir Magashi, had said that the Turkish firm was expected to develop a local brand of textile materials and accessories. He added that a total of $13 million (N4.68 billion) would be invested by the firm to finance the enterprise and make it viable.
This development, stakeholders in the textile and garments industry have posited is capable of keeping the industry comatose. They believe that the ray of hope that was beckoning in the industry is fast dissipating if this development stands true.
Creative Director of Ruff ‘n’ Tumble, Adenike Ogunlesi, described the development as shocking and capable of keeping the moribund industry in a coma.
“When President Muhammadu Buhari directed that all uniforms shouldn’t be imported any longer, we were all excited. We felt it was high time for the local manufacturers to build capacity. We have met with the military and paramilitary bodies, and they have promised to patronise us. We went as far as coming up with an MOU, they made corrections and returned it to us. If you don’t invest in capacity building, how do we grow? The government needs to believe in us. This is an attempt to kill the local industry because we have been looking forward to building local capacity,” she lamented.
Similarly, the Managing Director, Sam and Sara, Mrs. Folake Oyemade, described the move as unpatriotic, saying it could further make the nation dependent on other countries of the world.
In her words, “I was shocked when I learnt about it because President Buhari has more interest in reviving the textile industry and I don’t believe he was aware of this development. For me, I don’t understand why the job is given to a foreigner when local investors have indicated interest in it. I have two garment factories and we have more than 1,000 workers. I don’t know what the Turkish firm is bringing to Kaduna State that we cannot do. The state government even offered them equity. We had approached them for the same project and we didn’t ask for any equity, yet it didn’t see the light of the day. We offered to build a factory and employ their youths but nothing came out from it,” she lamented.
Adereti, however, sounded a note of caution and offers a form of advice to the government.
In her words, “The government has started a good thing by kick-starting the revival of the industry, but they should be mindful of doing anything capable of rubbishing their good intention. You know for every action there must be a reason and the reason is what we do not understand yet. Already, they have carried out an inspection to see our capabilities, it is only when they do not patronise us that there can then be an issue. So, they should be mindful of building with one hand and scattering with the other,” she cautioned.
