TRALAC - Trade Law Centre

Nigeria: Federal government set to revive textile sector

Wednesday, 18 November 2009

Source: Daily Champion (Nigeria)

At the peak of its boom in the 1970s through to the 1980s, the Nigerian textile sub-sector gave direct employment to some 250,000 workers.

Those who indirectly depended on the sub-sector -- ginneries, textile dealers, tailors, cotton farmers, haulage companies, etc -- were in their millions.

Statistics show that currently, the few surviving textile factories in Nigeria employ less than 24,000 workers.

This has contributed immensely to the battalions of unemployed youths, some of whom have taken to anti-social activities and are disturbing the peace.

Many factories, including the octopus Arewa Textiles, have closed shop. A few others, among them the colossal Afprint Textiles in Lagos, diversified into auto sales and other forms of retail business to stay afloat.

However, the Minister of Commerce and Industry, Chief Achike Udenwa, is convinced that the textile sub-sector and other grounded industries in Nigeria will rise anew from their funeral pyres like the mythical bird, the Phoenix.

"The greatest employer of labour is the private sector. Not more that five per cent or 10 per cent of us can work for government and its agencies; the rest have to be employed by the private sector.

"Government is putting up steps to ensure that we revive the industrial sector, as well as the mining, solid minerals and agricultural sectors.

"If we are able to get this working, with the other industries that will offshoot from them, you will see we can employ quite a number of our youths," Udenwa explains.

He, however, describes as pathetic the current situation where everybody wants to be a degree holder but ends up becoming unemployable on graduation due to the lack of relevant skills.

"Do you know that you can hardly find good carpenters, good auto mechanics, good builders around?" he asks, saying the 6-3-3-4 system of education should be made to work to defeat unemployment.

The 6-3-3-4 system "envisages that after the junior secondary, we branch out, but one of our biggest problems is that everybody will want to hold university degrees".

Udenwa says efforts should be geared toward tailoring education curricula to suit the economy by ensuring that intakes into tertiary institutions acquire the skills the economy requires.

The minister says the disbursement of the proposed N100 billion Textile Fund will be carefully monitored to ensure that only genuine companies benefit from it.

"Don't think that immediately the N100 billion is given, the textile industry will start booming," he cautions.

"No, some of the things we are doing now, like promoting made-in-Nigeria goods and trying to see how we can curb dumping, smuggling and faking, will help the industry to get up."

Udenwa says the government will put in place mechanisms to monitor entrepreneurs who are eager for funds to reactivate their industries.

He notes that such funding may not be in cash. "It could be in form of purchase of machinery.

"We may want to know where you want to buy it and pay for it and all these would be worked out and managed by professionals in the Bank of Industry."

The minister explains that the money will not be a "dash" (gift), but will be a low-interest loan that is well monitored.

He expresses the hope that the proposed fund will be well utilised in view of the mismanagement of such funds in the past.

Udenwa adds that if smuggling, which he describes as "the killer of the manufacturing sector", could be reduced drastically, most of the industries, especially in the textile sector, will spring up, even without government intervention.

"So many people are saying that we want stimulus; the best stimulus we can give to the manufacturing sector in this country is to wipe out smuggling."

The minister, however, adds that he had talked with the Nigeria Customs Service Comptroller-General and heads of other agencies on how to effectively tackle smuggling and save local industries.

According to Udenwa, the major reason some industries such as Dunlop and Michelin (tyre companies) closed shop and left Nigeria, is smuggling.

"They did not close because of high cost of production alone, but mainly because of smuggling of inferior tyres and they could not compete."

He blames China for the faking of Nigerian made goods, especially textiles.

"I have had samples of textile products coming into the country and if you see them, they bear Nigerian labels.

"Instead of bearing 'Made in Nigeria', they bear 'Made for Nigeria' or 'Made from Nigeria'.

"So, if these products were not of good quality, would somebody go and fake them?"

The minister expresses dismay that Nigeria has not been able to leverage much of the African Growth and Opportunity Act (AGOA), a 2000 United States legislation designed to open the American market to African products and goods.

"In fact it is not that we are not doing anything, but what we are doing is quite negligible.

"The AGOA programme is to offer training to Nigeria exporters to enable them to access the U.S. market through good finishing and packaging of their products so as to reap some benefits.

"It was well meant when it was enacted in 2000, just before President Bill Clinton left office. It was to help African countries so that some of our products move into America duty-free."

He says since it has been discovered that poor finishing and packaging are the inhibiting factors, the Nigerian manufacturers are being trained on how to overcome these.

According to him, exporters must know the minimum standard required for a good to enter America and must ensure that the finishing and packaging conform to what obtains in the USA.

The minister notes that the Nigerian Export Promotion Council (NEPC) is working with exporters to ensure good finishing and packaging so as to find ready markets abroad.

He, however, observes that recently, Nasarawa State was able to export yam to Europe through AGOA.

"I was there in Britain when our own yam came into the UK for the first time. You just don't take any yam to the UK without knowing how it was planted, the soil type."

According to the minister, the species of yam to be exported must be specified and when the yam comes out, you must test for the acidity and so on.

He adds that a lot is being done at building the capacity of Nigeria's Garment Producers to become more competitive and effective in their production of clothing for export.

According to Udenwa, this initiative was rewarded with the first export shipment of garments produced in Nigeria to the USA in July 2008.

He says the NEPC, in line with his ministry's policy thrust, is striving to increase the productive capacity of the manufacturing sector and the country's non-oil export earnings, as well as to reduce the importation of consumable goods.

The minister says discussions are ongoing with officials of the Power Holding Company of Nigeria toward ensuring that industrial zones are placed on dedicated power lines to ensure constant and adequate electricity supply.

Udenwa stresses that the ongoing "Buy made-in-Nigeria" campaign is designed to shift Nigerians' taste for foreign products, even when they are inferior in quality to local alternatives.

Nigerians are waiting for the Minister's promises on the industrial sector to come true. This would not only reduce unemployment and crime, but would improve the living standard of the average Nigerian.



“ Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Nigeria's bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.