• Sunday, May 26, 2024
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BusinessDay

Another risk to industry’s growth

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DANIEL OBI

Nigeria’s local textile industry is on extinction and one of the major challenges it is facing is importation of fabrics. It is calculated that over N17 billion textile materials are imported from Dubai alone yearly. Disturbed by the trend, last year, the Manufacturers Association of Nigeria (MAN) insisted for a state of emergency in the industry to avoid its total collapse.
Similarly, there were about 24 carpet manufacturers in Nigeria, but this number has been reduced to only three as at present, throwing thousands of people into the unemployment market. Subsequently, carpets industry contribution to GDP, akin to the textile sector, declined massively. Apart from the issue of infrastructure, the industry also faced the challenge of importation.
Over time, experience has shown a systematic but steady increase and large dependence on importation of goods even those with local substitutes. The penchant to import items that have local substitutes is deplorable. Apart from depleting our scarce foreign reserves, it enriches the foreign companies and their economy and we cannot continue to enrich other countries at our expense.
Though coming belatedly, the recent prohibition on importation of rugs and carpets in Nigeria could have been informed by the need to grow the local industry. The reverse on the policies that had favoured importation of carpets from abroad had been welcomed by industry stakeholders.

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This is part of the efforts to restore life in the almost dead carpet industry by the government, a carpet manufacturer said but regretted that in spite of the ban on imported carpets, these materials many of which are fairly used in the name of original, could still find their way into the markets. He therefore called on government to make the ban total with the Customs policing the borders appropriately.
The importers who prefer the easy way out and who flood the market with those carpets, leaving the indigenous companies to wallop in hard times, ordinarily may not be contented with the government u-turn. Government’s preference to ban importation of rugs over hike in duties, following the manufacturers’ advice indicates government’s total resolve to protect local industries. Experts wish this resolve is carried to logical conclusion.
Recently, local carpet manufacturers have been expressing their commitment to sustaining the industry with various massive expansion programmes and investments. In the past 4-5years, over 5billion naira has been injected into the market an effort that has received commendations from industry watchers.
Lucky Fibres Nigeria Limited, manufacturers of Nobel Carpets has undertaken a massive expansion program with a cash outlay of USD 10 million. The company has put up a new factory shed that houses two new machines. Lucky Fibres becomes the first company in Sub Saharan Africa to put up a printed carpet machine. The machine costing USD 4 million is purchased from Zimmer of Austria, who is the sole supplier of printed carpet technology in the world. This is a plus to local manufacturing, an investment that would not be possible if imported carpets are allowed.
In the same vein, Jay Kay Carpets has made huge investment in latest technology and set up the first factory in West Africa to produce woven rugs & carpets. Information from the company reveals that a sum of 2billion naira has been committed to these two projects.
Robert Obiora agues in his Road map to industrialization that Japan is what it is today because of its closure of imports during the Meiji reforms. Other countries that have developed industrially did the same. He maintains that for the country to develop industrially, time has indeed come for her to boycott all boycottables so that our local industrial base would grow.
He further argues that how can we industrialize in the face of huge importation? When you see the mounting heaps of containers that litter every available space in Apapa and Kiri-kiri industrial layout alone, you would know that everything in Nigeria is virtually imported. You should not be surprised if Nigerians import water, air and sand. This is not an exaggeration. If you allow Nigerians, they will import toilet rolls, toothpicks and ice blocks from China, Taiwan and Japan. Worst of all is that they will import fake or inferior forms of these items in order to maximize profit.
The Minister of Commerce and Industry and former governor of Imo State, Achike Udenwa, acknowledged recently that among myriads of problems facing Nigeria’s industrialization efforts is the activity of smugglers and the penchant of the average Nigerian consumer for foreign made goods even if they are of inferior quality.
Others, he listed are infrastructure and high cost of transportation of goods from point of manufacture to other parts of the country.
It was therefore surprising when some persons under the umbrella of the National Carpets/Rugs Dealers Association (NACADAS) called for the lifting of the ban on importation of carpets by the Federal Government. Possibly, these persons need to be enlightened on the benefits of local manufacture, in spite of its interim cost effects.
In its editorial, The Sun Newspapers asserts that the decision by government to ban the importation of certain items like carpets is good for our developing economy as it has two very important impacts: to protect our environment from being a dumping ground for all sorts of products (substandard in most cases) and to protect indigenous industrialization in Nigeria. It is good to protect and promote the development of local industries, because they provide employment, skill acquisition and poverty alleviation for thousands of Nigeria,
Asking the government to lift the ban on carpets when there are local manufactures is like asking the government to close over N4 billion investments in the industry and ask that over 2,000 employees in the carpet industry to go home. Some of who may turn to social urchins.
An analyst regrets that if for instance, mothers of textile and carpets industries could close down, that tells us the degree of the problem in Nigeria. Nigeria is currently experiencing real dumping of products, rice and other banned materials through smuggling which is said to have a detrimental effect on the domestic industry.
In late 1980s Nigeria liberalized its economy and signed a number of trade agreements with other countries, such as Benin Republic and international institutions such as WTO. This led to the opening up of our borders and subsequent importation of assorted items into the country.
As pointed out by experts, the massive importation of carpets and textiles both second hand and new garments, especially from Asia, Malaysia, China, Singapore and UAE led to the shutting down of many carpet manufacturers, local textile companies and laying off millions of jobs.
According to labour unions, other one million persons whose jobs are linked to these industries, such as traders and cotton farmers have all lost their means of livelihood as a result of the closure of many companies.
The challenge is that the ban of some of these both carpet and textile materials, according to a source is only exercised on the pages of newspapers. Government did not and has not made serious efforts to make the law effective for reasons best known to it.
It is the belief of observers that what any person that wishes Nigeria well should be recommending is the right environment for the survival of the remaining three carpets industries. According to Akpan Bassey, a factory worker in one of the closed companies in Lagos, Nigerians are beginning to appreciate some locally made goods even in the face of open market or non-ban of these materials.
It is expected that following the ban of carpets and with right operating environment, the closed carpets manufacturers would likely bounce back with its consequent economic value.
With the increasing population of Nigeria regarded as a big market in the African continent, carpet business would be a thriving one and those who see the opportunity would not fail to capitalize on it.
Sun maintains that asking Nigerians to patronize made in Nigeria goods is a good development. But efforts should be made to improve the quality of such goods. There is no doubt that Nigeria’s industrial growth can be enhanced by provision of adequate power, increase in non-oil export and drastic reduction of importation of consumables’.
Ban on importation of carpets is a welcome development. Local manufacturers of carpets should capitalize on this to satisfy the market with affordable offer.