The failed $2bn national textile policy


A report published yesterday indicated that four years after the federal government approved a national policy on Cotton, Textile and Garment (CTG) Nigeria is yet to meet any of the targets set in the policy.

The appalling situation paints the gory picture of a comatose sector that hitherto prided itself as the largest employer of labour and a major contributor to the country’s gross domestic products (GDP) which is seemingly defying policy frameworks geared towards its revitalisation.

 In 2015, the federal government through the Ministry of Industry, Trade and Investment, launched the National Cotton, Textile and Garment Enterprise Policy to stimulate the textile industry. Despite not meeting any of the targets, the Central Bank of Nigeria (CBN) recently announced foreign exchange ban for textile importers to help bolster the local textile industry.

The policy, initially aimed at developing the local textile industry, launched under Olusegun Olutoyin Aganga as the then trade minister four years ago, is aimed to create an environment to encourage textile production in the country and limit importation.

The policy document projected savings of $2 billion in foreign exchange through import substitution, increase in the level of direct employment in the sector from the then 24,000 workers to 50,000 workers by the end of 2015 and to 100,000 workers by 2017.These targets have not been achieved even by 2019.

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The policy also targeted an increase in seed cotton production in the shortterm from 200,000 metric tonnes to 500,000 metric tonnes by the end of 2015 and indirect employment expected to increase from the current level of 650,000 people to 1 million people by 2015, and 1.3 million people by 2017.

 “Export earnings are also expected to increase to at least $3 billion annually or 0.5 per cent of the global share of international trade in textiles and garments in five years.

 FDI into the Nigerian textiles and garment sector will increase to as high as N255 billion cumulatively over the next five years,” the policy stated. Details of the implementation of the policy under Dr. Okechukwu Enelamah have remained sketchy as it appears the trade ministry under him has abandoned the policy.

 Earlier in 2010, the federal government had introduced the N100 billion Cotton, Textile and Garment Revival Fund managed by the Bank of Industry (BoI) to turn around the fortunes of the textile industry, but just like the national policy, it has also failed to revive the textile sector.

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Explaining why federal government’s N100 billion Cotton, Textile and Garment Revival Fund could not achieve the desired goal, CLS Stockbrokers Limited, a member of the FCMB Group, said most players in the textile industry “did not avail themselves of the loan as repayment became a major challenge to those who did, since it was difficult to contest with imports from Asian countries which have taken over the market.”

 The company, which is a member of the Nigerian Stock Exchange, explained that the ‘National Cotton, Textile and Garment Policy’ approved in 2015 targeted cumulative investments of over N255 billion (US$0.71billion) in the textile industry over five years.

 The policy provides that all military, para-military agencies and government schools purchase only made-in-Nigeria textiles and garments.

“The Nigerian textile industry can still be a major revenue earner for Nigeria and a major employer of labour considering the local availability of the major raw material (cotton) and the chemicals needed for production (mainly by-products of petroleum). However, the success of the industry depends more on the ability of the government to address the fundamental challenge of poor infrastructure, mainly power.

” Speaking on the development, an economist, and former Director General, Abuja Chamber of Commerce and Industry (ACCI), Dr Chijioke Ekechukwu, said that latest CBN’s forex restriction for textile import will not have so much effect as importers will continue to import textile by sourcing for forex through the secondary forex markets of bureau de change and through privately arranged international money transfers. Ekechukwu said the restriction will rather increase the price of the imported textile materials and the price burden will be borne by the ultimate consumers.

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He explained that the forex restriction is not a ban on textile materials, but “a not-valid-for-export regime,” which is not likely to protect the local textile manufacturers.

 The United Nations had in a report stated that in 1987 there were 37 textile firms in Nigeria, operating 716,000 spindles and 17,541 looms. Between 1985 and 1991, it recorded an annual growth of 67 per cent and as at 1991, it employed about 25 per cent of the workers in the manufacturing sector. Sadly, this once cherished national cash cow has now collapsed.

Blueprint is, therefore, miffed that a policy formulated to return Nigeria’s textile industry to its golden period is being frustrated by bureaucratic bottlenecks.

That a policy document that would facilitate the nation’s industrialisation and boost employment remains dormant for four years is as unacceptable as it is undesirable. Consequently, we call on the federal government to set up an inquiry with a view to determine the immediate and remote causes of the failure of the national policy on reviving Nigeria’s textile industry.



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