Revitalising the textile, garment industry

textile industryTHE Buhari administration’s move to get the mills rolling again in the country’s cotton, textile and garment companies with prospects of massive employment generation is certainly laudable.

But these expectations are very high amid fears that this would turn out another talk just to excite industry stakeholders and a horde of retrenched workers as well as other unemployed citizens.

Should the government pull through with its yet-to-unfold strategies, however, it would have succeeded in partly opening a window for alleviating the misery of the working class since the industry’s decline in the late 1990s.

Indeed, a reversal of the trend of mass unemployment, using the agricultural and manufacturing sectors, would win the new government the hearts of all Nigerians.

Of course, this government can build on the N100 billion intervention fund thrown at the problem in 2009 when the Umaru Yar’Adua administration formally inaugurated the Cotton, Textile and Garment (CTG) Revival Fund currently managed by the Bank of Industry (BoI), through loans to textile companies. The BoI claimed in 2013 that it had succeeded in rescuing over 8,070 such lost jobs through the intervention and that “capacity utilisation of most beneficiaries had increased from below 40% to about 61 per cent.”

But in reality, this is a far cry from the 500,000 job placements the industry recorded when over 160 vibrant mills were rolling before the dip in fortunes, especially with the lifting of the official cover on importation of textiles. The situation has, of course, never been the same again. In fact, the number of the employed in the sector significantly came down to about 30,000 due to deplorable state of infrastructure and other factors. This dire situation has, therefore, cut out the job for the new government in policy formulation when its new special committee set up for the resuscitation of the ailing industry completes its assignment.

At the inauguration of the committee the other day, the Cotton, Textile and Garment industries were described as “a mere shadow of themselves” due to the influx of cheap textile materials into Nigeria and because of inconsistent government policies. In particular, textile companies had been caught in the grips of policy somersault, unstable political situation, high taxes and levies, manufacturing sector’s near-collapse generally with poor infrastructure leading to high production costs, rising taste for foreign products, smuggling and more.

The hope raised at the inauguration that the current administration is irrevocably committed to ensuring substantial growth in high quality cotton to feed a thriving textile and garments industry must, however, be sustained. Because any serious government intent on industrialisation ought not to ignore the value addition of the CTG sector among other key industries. More importantly, the agro-based industries role in developing economies and Nigeria will be better for it in terms of employment prospects and as a catalyst for growth and development.

To have a share of the global textile market currently worth more than $400 billion, the focus should, therefore, be how to, with the right incentives and conditions, involve a substantial number of citizens in productive agriculture as a starting point.

It must, however, be remarked that one notable problem with Nigerian government committees, from experience, is lack of attention to reports turned in therefrom. This new committee’s report, therefore, must not remain on the shelf as usual if government is serious about the textile sector’s revitalisation.

In the boom period between 1985 and 1991, according to figures, the sector recorded a yearly growth of 67 per cent and as at 1991, it employed about 25 per cent of workers in the nation’s manufacturing sector. Functional mills numbered about 180, employing about one million hands and accounted for over 60 per cent of industry capacity in West Africa. It was indeed the second largest employer of labour after the Federal Government.

However, the party was not going to last for some inexcusable reasons. By 2002, about 60 per cent capacity utilisation of 1996 had gone down to about 28 per cent. The lifting of the ban on importation then worsened the situation in 1997 as companies closed down one after the other while some relocated to other countries.

The collapse was also driven largely by smuggling without any sign of protection of the local companies by government. It is scandalous that by 2014 as performance remained at a low level due to lack of a serious enabling environment and policy inconsistency, the nation was losing up to N75 billion yearly to smuggling through unclaimed Customs duty and Value Added Tax (VAT). Today, smuggled garments take about 90 per cent of the local market in a country that spends about N300 billion on textiles and garments importation

As part of the revival strategies, it might be necessary for government to encourage official patronage of surviving mills, get Nigeria Customs Service to do more surveillance, while punishing infractions of officials who encourage smuggling. The country should also take full advantage of the recent implementation strategies of the Common External Tariff (CET) as agreed by the Economic Community of West African States (ECOWAS).

The regulation is aimed at freeing the borders of member countries to encourage local manufacturers find more markets, even though the danger of increase in imports with adverse effects on yet-tottering Nigerian textile industry may seem real. Still, the gains of a vigorous pursuit of revitalisation of the textile industry would outweigh the losses. And that industry is one Nigeria must rebuild and make to thrive.
 



No Comments yet

Related