Business

Ban textiles importation for 5 years to revive industry –Experts

•Cotton sector intervention will gulp N100bn –Emefiele

 

 

In the 1980s and 1990s, Nigeria was recognised as Africa’s largest textile industry with over 180 textile mills in operation, employing close to over 450,000 people, and contributing over 25 per cent of the workforce in the manufacturing sector. PAUL OGBUOKIRI reports that with government’s recent efforts to revive cotton production, the main raw material for textiles making, the country could regain its lost glory in the sector

 

Collapse of once vibrant industry Nigeria’s cotton and textile industry was in the 80’s a key player in the national economy particularly in the provision of livelihood for about 20 percent of the population with 600,000 work force operating close to 170 textile mills across the country.

 

The industry then generated an annual turnover of $8.95 billion; an average of 25 per cent of the sector’s gross domestic product (GDP) which accounted for not less than 10 per cent of corporate income taxes. Figures obtained from the Manufacturers Association of Nigeria (MAN) shows that 1.3 million cotton growers in the country’s cotton production belt, if factored into their dependency ratio of 1:8 worker per dependant, then it is obvious that 17.2 million Nigerians derive their livelihood from the industry.

 

Nigeria was ranked the second largest textile hub in Sub-Saharan Africa queuing behind South Africa. She represented 63 per cent of the textile capacity in the West African sub-region before the neglect and policy inconsistencies that capsized the sector.

 

Figures showed that the number of textile and garment factories after the storm, fell from 175 in the mid 1990’s to less than 25 in 2010 while employment dropped from 137,000 in the 1990’s to 60,000 in 2002 and further to 24,000 in 2010.

 

As a consequence, this led to the decline in cotton lint production from 98,000 in 2006 to 55,000 tons in 2010 and export of cotton went down from $44 million to $31 million within the same period.

 

Records further indicated that capacity utilisation in the industry dwarfed to 20.14 per cent in 2010 from 50.75 per cent in 2003 while many surviving ones are close to extinction.

 

Boasting cotton production, CBN to the rescue The Federal Government has intensify existing efforts to revive cotton production by allocating more funds for the development of the sector and providing inputs at reduced price to farmers to encourage increase cotton cultivation, a report has stated.

 

In 2015, the Raw Material Research and Development Council (RMRDC) offered cotton farmers about 5.82 metric tons of SAMCOT 7’ 8’ 9’ 10’ 11’ and 12’cotton seeds, in collaboration with the Institute of Agricultural Research (IAR), under the auspices of the National Cotton Association of Nigeria (NACOTAN).

 

This distribution yielded an approximately five per cent uptick in cotton production in the country between 2015 and 2017, the report stated. Cotton is also a focused commodity under the Anchor Borrower Programme initiative of the Central Bank of Nigeria.

 

The programme provides small scale farmers with necessary inputs in cash and in-kind services to enhance productivity. In May 2019, the governor of the Central Bank launched the distribution of cotton seeds to 150,000 cotton farmers in Katsina State, the leading cotton producing state in the country.

 

The farmers were also offered other inputs like fertilizers, pesticides, and knapsack sprayers. It was expected that the initiative would help to improve yields of cultivated cotton to four metric tons from the current one metric ton per hectare.

According to Financial Derivates Limited report, Cotton output in the country jumped 123.75 per cent to 844,337 metric tons in 2017 from 377,364 metric tons in 2007. This was 65.51 per cent more than Nigeria’s output in 2017. “The country is the leading cotton producing country in 2017, a position it has sustained for about a decade.”

 

Turnaround in sight

 

Even though there had been skepticism over the implementation of the intervention fund, industry watchers still believe that a turnaround is imminent. The recent validation workshop on the midterm evaluation of Nigeria’s Cotton, Textile and Garment (CTG) Industry in Abuja afforded a unique opportunity to appraise the nation’s comatose but once vibrant cotton, textile and garment industry.

 

At the workshop stakeholders submitted that the problems of the industry, to a large extent, was due to obsolete equipment, unbridled importation that allows for the dumping of highly subsidised alternatives into the Nigerian market and smuggling and counterfeiting of Nigerian textile products and absence of long-term and low interest fund as well as dearth of technical manpower.

 

According to Jaiyeola Olarenwaju, Director General of the Nigerian Textile Manufacturers Association (NTMA), government’s lack of consistent policy direction, lack of protection of nascent home industry due to globalisation and liberalisation policies, high interest rate among others contributed to the sharp decline of activities in the sector.

 

He also agreed that the misfortunes of the sector dated as far back as 1985, resulting in unprecedented job, investment and revenue losses, occasioned by massive influx of cheap products into the country, changing consumer tastes and habits, and poor infrastructure, among others.

 

Ban importation of textile for at least five year

 

According to Financial Derivatives Limited, the influx of imported textile materials, however, has negatively affected the productivity of the industry. The number of textile mills dropped to 25, employing not more than 20,000 workers.

 

The report showed that the importation of textile products was estimated at approximately $4 billion annually, just as it stressed that the revival of cotton production in the country was imperative to stimulating the ailing textile industry.

 

It is against this backdrop that the Nigerian Senate has called on the Federal Government to ban the importation of textiles for a period of five years to allow for the production of local textiles.

 

Senator Kabir Barkiya, who raised the issue during the plenary recently, explained that the textile industry played a significant role in the manufacturing sector of the Nigerian economy with a record of over 140 companies in the 1960s and 1970s. “The textile industry recorded an annual growth of 67 per cent and as of 1991, employed above 25 per cent of the workers in the manufacturing sector.

 

 

The textile industry was then the highest employer of labour apart from the civil service.” He noted that the industry had witnessed a massive decline in the last two decades with many textile companies such as Kaduna Textile, Kano Textile and Aba Textile closing shop and throwing their workers into the job market. On his part, Senator Robert Boroffice, noted that the importation of textile materials was fuelled by the comatose textile industry.

 

“The closure of our borders is an eye-opener. China closed its borders for 40 years for its industrialisation and development. I believe that the closure of our borders should be extended to allow us to put our house in order.” Suspending textile imports will be a big move to revive the industry, but we can’t afford to implement that alone.

 

There are other factors to consider. One thing is the need to provide the necessary infrastructural facilities that will aid the growth of the industry, especially power supply.

 

Then, we should encourage local textile manufacturing companies by providing them with soft loans, tax holidays and easy access to credit facilities. We should also approach foreign textile companies for investments in the country.

 

That has more advantage to offer the economy than when they only export to Nigeria. It’s only after we have a number of companies running that we can think of shutting the borders against textile imports.

 

At the moment, it’s right to say that over 90 per cent of our textile materials are imported. For a country that is that reliant on import, we can’t survive border closure without having alternatives readily available.

 

Turn around for the industry

 

The industry is expected to begin to experience a turn-around considering the huge hope offered by the Bank of Industry’s (BOI) intervention fund and the renewed commitment of the bank to execute the mandate of the government’s intervention initiative.

 

To this end, the National Cotton Association of Nigeria has stressed the need for the Federal Government to re-introduce the Nigeria Cotton Standard. Anibe Achimugu, the National President of NACOTAN, said the re-introduction was very necessary now, especially as the government was committed to resuscitating the cotton and garment sectors.

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