Following the debate on a motion sponsored by Senator Kabir Barkiya from Katsina State during a plenary on “Urgent need to revamp the nation’s comatose textile industry,” the National Assembly has appealed to the Federal Government to provide the necessary infrastructural facilities, especially power supply to local textile manufacturing companies, to revamp the industry.
The Senate also called on the government to encourage local textile manufacturing companies by providing them with soft loans and easy access to credit facilities through the Bank of Industry (BoI).
During the debate, Sen Barkiya said the textile industry played a significant role in the manufacturing sector of the economy, with a record of over 140 companies in the 1960s and 1970s.
He said: “The textile industry recorded an annual growth of 67 per cent and, as at 1991, employed more than 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 companies such as Kaduna Textile, Kano Textile and Aba Textile, among others, closing shop and throwing their workers into the labour market.
Stakeholders, who spoke with The Nation on the proposed ban, said the Senate’s appeal was a step in the right direction. According to them, the industry can generate over $10 billion annually across the value chain and employ over two million people if the necessary support is given to the sector.
The stakeholders cited an instance that it was due to the previous ban on importation of textiles that the industry witnessed the influx of many investors in 1960s and 1970s with some of them in Kaduna and Kano, who pursued backward integration.
One of the stakeholders and a former worker of the moribund Aswani Textile Industry, Mr. Suarau Arogundade, who spoke with The Nation on the sideline of their meeting in Ijebu-Ode, Ogun State, commended the Senate for the initiative and urged the government to follow the lawmakers’ advice to boost the economy and create jobs.
“Nigeria textile industry was one of the largest industries in Africa before it went under based on bad government policies. The industry employed over one million people in the 70s and 80s and controlled over 60 per cent of market share in the country. It accounted for over 60 per cent of the total capacity in West Africa and recorded an average growth rate of 12.5 per cent in 1970s. Then, the industry used to generate over $2 billion annually across the value chain based on the competitive advantage the country enjoyed during the period and it can generate over $10billion annually now, if the right policies are put in place by the Federal Government.
“It is regrettable that about 10 years ago, the government took an unprecedented and giant step to revive Nigeria’s prostrate and comatose cotton and garment industry. But the bail-out initiative called the Cotton Textiles and Garment- CTG -Industry Revival Scheme that signaled the start of a N100billion injection of funds to kick-start an industry that once provided employment to the largest number of Nigerians, generated 25 per cent of the manufacturing GDP and contributed 20 per cent of corporate taxation revenue in the country did not yield the expected result,” Arogundade said.
He, therefore, lauded the Senate’s move, saying it would complement the government’s efforts to put the textile industry back on track.
He identified some constraints dogging the industry, which are insufficient cotton seeds for production, high cost of operation, smuggling and counterfeiting, high influx of cheap textile and garment products into the country, lack of enabling infrastructure, especially steady power supply, limited access to funds and poor production standards, among others.
A garment manufacturer at the meeting, Mr. Williams Adegoroye, said Nigerians needed to support the move.
“Considering our population and natural endowment, our textile industries are supposed to be playing a dominant role in the region just the way China has dominated the Asian market. Our textile industry with over 180 firms in the 1960s and 1970s ought to have penetrated and be in control of the regional market with Nigeria’s brands while extending the market beyond the West and Central African sub-region.
“But it is a shame that this is not the case. Textile industry in the country used to be a large and flourishing industry and contributed enormously to the country’s employment generation, Gross Domestic Product (GDP), government revenues and non-export earnings, but we lost all that during the military rule,” he said.
Adegoroye lamented the inability of the textile industry to take advantage of duty free exports to the United States (U.S) as encouraged by the U.S. African Growth Opportunity Act (AGOA) 2000.
“Textile industry is a first-generation industry in Nigeria. The industry provides an industrial base for almost all countries. Kaduna Textile mills, established in 1956, was the first textile firm in the country, followed by Nigeria Textile Mills in Lagos in 1962. Other top textile mills in the country are Aswani Textile, Afprint, Enpee industries, United Nigerian Textile Limited, Arewa Textiles, Five Star, etc.,” he added.
Adegoroye regretted that many of the textile industry stopped production due to poor operating environment in the country, adding that restoring them to their past glory was vital to the nation’s economic growth and the government’s job creation objectives
He urged the National Assembly to resolve the challenges in accessing loan by the textile industry players.
“Remember that in 2010, the government introduced N100 billion Cotton, Textile and Garment Revival Scheme to stabilise and resuscitate some closed factories.
The Central Bank of Nigeria (CBN) later in 2016 floated a N50billion intervention fund as working capital, debt takeover and long-term loan to the Cotton, Textile and Garment value chain. Now is the time for the government to make public the names of the companies that have benefited from the funds,” he said.
Also, an economist and textile importer, Mr. Frances Johnson threw his weight behind the National Assembly decision to ban the importation of textile into the country.
He said the amount of foreign exchange they spent on importation of textiles was more than half of the amount needed to rebuild the failed textile companies.
Johnson said the ban, if supported by the Federal Government, will inspire local production of textiles for both local and international markets.
“This is a good initiative coming from the Senate, because if you look at what we spend on importation, it is huge; if that amount is used to develop local production, it will automatically impact on the Gross Domestic Product (GDP).
“It is high time the Federal Government controlled the levels of goods imported into the country. Too much dependence on importation is killing local industries due to unhealthy competition with foreign goods.
“Based on our population, the country is a very good investment hub for foreign investors and companies because of the very ready market it had waiting to buy the textile products,’” he said.
Johnson praised the Senate, saying once the government bans the importation of textile and the country has the capacity to produce, Nigerians will have no alternative than to purchase what we are producing locally and the sectors will begin to contribute significantly to the GDP.
Government policy on the ban, he said, must include financial support to textile manufacturers with the provision of funds at single digits rate, to refit, retool and upgrade their factories in order to produce high quality textile materials for the local and international market.
“Given the high domestic demand for textiles, the intervention of the Senate would be able to create jobs for the economy while increasing the production of textiles in the country.”
Another stakeholder, Mr. Sunday Gabriel, said when the amount spent on outfits for social and religious activities on a weekly basis was considered, the potential market size would be well over $15 billion annually.
Some of other stakeholders, who spoke with the paper, also commended the Senate for announcing the measures that may lead to revive the moribund textile industries.
They, however, urged the government to strengthen the capacity of domestic industries and enhanced their competitiveness.
A former union leader at Afprint, Mr. Alaba Yekinni, said the power issue must be addressed before the ban must be implemented.
“It is impossible to achieve rapid industrialisation without resolving the issue of power and the deficit in key infrastructure.
“Textile production is energy intensive. This is a high energy cost environment and it is very difficult for any energy intensive sector to survive. That is why we want the Senate to ensure that the power issue is resolved before making their recommendations in black and white.
He stated that trading in textiles was also a major economic activity in the country, both in the northern and southern parts, and many were making their living from it.
“Many Nigerians make a living in the marketing of textiles. The lawmakers cannot afford to ignore this segment of economic players. The traders are the bridge between the producers and the consumers.
“It is, therefore, very important for Federal Government to take into account the full ramifications of the consequences of policies and collateral outcomes before instituting the ban.
Yekinni said the industry had been a beneficiary of several fiscal incentives and protectionist measures over the years, yet it had remained stagnant.
He said: “Some of them have even gone into receivership as they could not repay their loans. The lesson is that we should deal with the fundamental issues of production competitiveness in our economy.
“The textile industry needs to be saved from the excruciating burden of high operating and production cost.”
He added that for local textile industry to experience a boom in the line of the Executive Order, President Muhammad Buhari should order that all moribund textile companies be given one digit interest loans to revamp the industry.
Barkiya had said government policies such as increase in taxation, high cost of production and trade liberalisation resulted in massive importation of textile materials and negatively affected local production.
He said the resuscitation of the industry would provide additional revenue and assist the government to diversify the economy.
Another lawmaker, Prof. Robert Boroffice, said the importation of textile materials was because of the comatose state of 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 put our house in order,” Boroffice said.