As Nigeria targets reviving dead textile mills across the country, Frank Udemba Jacobs, president of the Manufacturers Association of Nigeria (MAN), believes the industry will require more than N100 billion Cotton, Textile and Garment (CTG) fund to return to its former virile state.
“More funds should be put into textile. Most of the machines there today are obsolete and the industry needs to retool,” Jacobs told Real Sector Watch in a telephone interview.
Retooling is a process of equipping a factory with new or adapted tools. The federal government set up the N100 billion CTG Fund in 2006 with a view to reviving the textile industry and making it competitive locally and internationally. More than 60 percent of the fund, which is domiciled in the Bank of Industry (BoI), has been disbursed so far.
Apart from the CTG fund, the Central Bank of Nigeria (CBN) recently set up a N50bn intervention fund to rejig the textile sub-sector.
As of October 2016, N13.4billion out of the 50 billion had been disbursed.
“The amount they are bringing is still small, which is why it looks like it is not making much impact,” Jacobs said.
Nigeria was a hub of textile manufacturing in 1970s and 1980s with companies such as Asaba Textile Mills, Aba Textile Mills, Kaduna Textile Mills, Afprint Nigeria Plc and Enpee Industries, among others, now dead owing to unbridled smuggling of Asian textiles, high cost of energy, poor patronage, as well as lack of cotton to feed the mills.
In fact, some industry players say that funding is not their biggest challenge but smuggling and unbridled importation of fabrics.
According to the Textile Manufacturers Association, about 85 percent of the $1.4 billion worth of textiles that flood the country’s market is smuggled mainly from neighbouring countries such as Benin Republic and Togo.
A research conducted by The Economist in 2015 noted that illegally imported Chinese-made fabrics imitating Nigeria’s signature prints flooded Nigeria with some Customs officials turning a blind eye to them.
The report said that dilapidated textile factories in the country’s northern city of Kaduna were what remained of the industry, which in its heyday employed 350,000 people.
According to the World Bank, textiles smuggled into Nigeria through Benin Republic each year are worth $2.2bn, as against local Nigerian production estimated at US$40m annually.
“It is inconceivable how a textile sector that is so viciously exposed to smuggling hawks can survive and grow unless there are deliberately put-in-place measures to protect the industry,” said a research report conducted by Martin Ike-Muonso, a professor, on ‘Discriminatory Margins of Preferences for Selected Manufacturers Association of Nigeria (MAN) Sectors’ in 2017.
According to Jacobs, there is a strong need to put appropriate policies in place to revivify the industry.
“You need to have policies on ground to protect these industries. Unfortunately today, there are many unscrupulous Nigerians that collude with China to destroy local industries. They take Nigerian products to China, produce them and bring them into the country. This has to stop,” he stated.