Nigeria’s textile sector, so far how far?

President Muhammadu Buhari’s first step towards the realization of his administration’s mission to resuscitate the textile industrial sector was the inauguration of a Presidential Committee on Cotton, Textile and Garment (CTG). Speaking with journalists in Abuja recently, the Chairperson of the committee and Minister of State for Industry, Trade and Investment, Hajia Aisha Abubakar, harps on the problems, the achievements so far made, as well as the tasks ahead. DAVID AGBA reports.
At the inception of your committee, that is, the Special Presidential Committee on the Resuscitation of the Cotton, Textile and Garment Industry, what was the picture of the situation that you found on the ground?

We came onboard very anxious and determined to revitalize the textile industries, as was the President’s promise during the campaigns which was as well in response to the yearnings of the stakeholders. Sentiments were high and these deepened as we toured the textile factories in Lagos, Zaria, Kaduna and Kano. What we discovered was abysmal as all of them were at best, performing below production capacity. We discovered that most of the few staffers were only been maintained because employers do not want to lose good hands or because their parents had been active players in the sector. It was a feeling of helplessness and sadness as machines upon machines were covered in white and factories remained soundless. Some of the textile mills we visited, had stocks that had been sitting there for ages whilst there were those that had a few stocks they were working on. For an industry that had thrived and was known across the West African coast to as far as Mali and beyond, it was a pitiful sight. We are here talking of an industry which created millions of direct and indirect jobs and provided a means of livelihood to more than that number of people.
The significance of the textile industry and its impact 000on the collapse on the nation’s economy is best illustrated by the fact that, at its height, the sector had created over 800,000 jobs, representing 25% of the total number of jobs in the manufacturing sector, second only to the government in the employment of labor.
Before the advent of the present administration and the setting up of your committee, there had been several attempts made by preceding governments to salvage the textile industries. What would you say, were the factors responsible for the failures of past government interventions?
The CTG sector had been through several reforms and yet major issues still remained unsolved after several attempts to revamp the sector. The main objective or, thrust of these reforms was aimed at strengthening competitiveness and improving product quality. The many attempts on the resuscitation of the textile industry had been failing due, to the fact that the industry is saddled or burdened with a number legacy issues. The financing aspect for example, which was singly addressed by the previous administration only served to increase their indebtedness to the banks. There is no linkage within the value chain nor do the sector players even play among themselves. Apart from the infrastructure challenges, majorly with the high gas price, diesel and insufficient supply of low fuel pour oil; there are issues of distrust and insincerity across the line, low patronage, inadequate quantity and quality for supplies, the smuggling of fabrics and availability of cheaper options and so many more.

What is President Muhammadu Buhari’s administration doing differently to ensure that the on-going efforts do not go the way of previous government intervention policies?
To drive the sustainable implementation of the Cotton, Textile and Garment (CTG) policy, as well as President Muhammadu Buhari’s policy thrust and vision in the textile industry, the government in April 2016 inaugurated a special Implementation Committee involving critical stakeholders with my humble self, Minister of State, Federal Ministry of Industry, Trade and Investment, as Chairperson. The Committee is saddled with the overall task of revamping the sector and attracting investments across the value chain i.e. cotton farming, cotton processing, textile manufacturing and garmenting.
Accordingly, the Committee devised strategies of stimulating patronage and domestic market for locally made fabrics which includes; ascertaining quality and source of raw materials, identification of possible linkages of producers and end-users of locally produced fabrics and the development of the garment sub-sector for increased productivity. Our aim is to accelerate the sustainable increase in the production and processing of cotton and leverage on existing efforts to increase competitiveness in the sector.

What, specifically, has the committee identified as major challenges that need redressing and what are the remedial strategies that you have recommended or, put in place?
The Committee identified some key challenges affecting the sector such as lack of cotton lint, smuggling and counterfeiting, inadequate infrastructure, access to power, and funding and recommended actions to address them. We were able to facilitate the accessing of working capital to enable manufacturers acquire necessary raw materials and other essential inputs for production activities, the Committee also, took steps to secure loan re-financing and has recommended 60% of forex allocation from the CBN. However, the reality is that an estimate of approximately, N500 million to N1 trillion is projected for a complete turn-around of the nation’s textile industry. Funds needed by manufacturers to recapitalize have been hampered by the high interest rates charged on loans by financial institutions. The 30% interest rate charged in Nigeria by commercial banks would appear as prohibiting when compared for example; with the 6% charged in China on loans given to the textile manufacturers. Our own situation has tended to discourage prospective investors in the sector. We have accordingly recommended that government should consider the approval of the recommendation that the loans granted to the textile industries by the Bank of Industry, BOI, should be taken over by the Central Bank with a view to extending the repayment tenor. Also the accumulated 10% of tariff on imported textile materials meant for the development of local manufacturing sector in Nigeria should be made available to the sector players without much further delay.

One of the well-known challenges facing the textile manufactures is that of high cost of energy needed to drive their mills. How has your committee addressed this problem?
According to the International Textile Manufacturers Federation, (ITMF) power supply accounts for about 15% production cost in the textile industry. In Nigeria it is almost 45% for manufacturers in general and particularly peculiar to the textiles. Inadequate and high cost of energy in the textiles industry has been one of the major impediments to investment in the sector. The Committee in its bid to resolve the issue of high gas pricing has secured a presidential approval for the re-categorization of textile manufacturers as strategic industrial sector as against earlier classification in the “commercial sector.” The major implication of the policy shift is the elimination of the many bottle necks in the supply of energy to the textile mills. Once implemented by the gas producers, gas supply to the textile manufacturers will cost only 3 dollars per standard cubic feet as against the old regime of 8.45 dollars. Effective from January 2018 and the eleven (11) textile mills in Lagos state, already connected to the gas pipelines (i.e. Escravos) will be the immediate beneficiaries of this reprieve. Textile manufacturing companies in other parts of the country that are not connected will depend on supplies from refineries in their regions of location by means of CNG trucks.

What are the other pertinent issues your committee has encountered as constituting impediments to the revival of the textile industry and how are you going about resolving those challenges?
Other impediments hindering greater speed in the actualization of the President Muhammadu Buhari’s blue print of action in the textile sector include the un-abating phenomena of counterfeiting and smuggled textile materials especially from China. The Nigeria Customs Service and other security agencies will have to beef up vigilance in their statutory duty of checking influx of banned textile materials into the country. The committee has since held discussions with leadership of the Customs Service and I can assure you that much is being done with regards to checking the menace of illegal importation or smuggling of foreign textile materials into the country. Local production is expected to rise in accordance with government’s plans to reduce smuggling of cotton and other agricultural products.

Leave a Reply