• Saturday, May 25, 2024
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India’s textile industry holds big lessons for Nigeria

The growth of India’s textile industry holds big lessons for Nigeria, Africa’s most populous country, whose own fabrics sub-sector is limping with only three surviving companies.

India is today the world’s largest exporter of textile products after China, with 13 percent global market share, dwarfing Germany and Italy who now come third and fourth respectively.  India’s textiles industry is estimated at $108 billion, contributing five per cent to Gross Domestic Product (GDP) and 14 per cent to overall Index of Industrial Production (IIP), according to India Brand Equity Foundation.

The industry attracted Foreign Direct Investment (FDI) valued at $2.41 billion between April 2000 and December 2016, creating 100 million direct and indirect jobs with over 350 textile mills working, as against Nigeria’s three.

“What we need is the enabling environment. We cannot compete with the level of smuggling and counterfeiting going on now. We used to have about 127 textile firms in Nigeria but that has come down to two or three now,” said Grace Adereti, president of the Nigerian Textile Manufacturers Association (NTMA) in Lagos, at a Made-in-Nigeria stakeholders’ meeting.

“We had the revival loans but this didn’t work because our biggest problem has never been money,” Adereti said.

Indian textile firms are driven by government-led cost reduction measures which favour indigenous companies. There is cheap labour in India and  it is easier for Indian companies to get electricity as evidenced by the World Bank Doing Business index, which places the country at 26th position in Getting Electricity, as against Nigeria’s 180 (out of 189).

Like Nigeria, India has an arid land that grows cotton used by textile firms. However, unlike Nigeria whose ginneries in Kano and Kaduna are comatose, owing to poor cotton seedlings and demise of textile mills,  India has explored the opportunity to produce enough cotton to service textile mills and export 1,307.11 million kgs in 2015/16.

Findings show that there has always been India’s clear understanding of the entire textile value chain, from cotton to fibre, yarn, flax, handloom and hemp, and policies favoured all of them, unlike in Nigeria where policies sometimes show gross ignorance of manufacturing and agriculture value chains.

The Indian government set up over 20 textiles parks where companies enjoyed economies of scale and brought 52 textile mills through nine subsidiary companies under the functional National Textile Corporation Ltd,  the single largest Textile Central Public Sector Enterprise with headquarters at New Delhi.

The government of India provides assistance for creation of infrastructure in the parks to the extent of 40 per cent with a limit up to $6 million, as well as subsidies for manufacturers of textile machinery.

There is equally a 100 percent FDI allowed in the textile sector under the automatic route.

“No country can grow when its manufacturing sector is dying,” said Oluyinka Kufile, chairman of the Steel and Metals Group of the Manufacturers Association of Nigeria.

“We have to return to how it used to be, how our fathers left it for us,” Jufile said.

Apart from African Textile Manufacturers (ATM) Limited, Angel Spinning and Dyeing Limited, and Spinners and Dyers Nigeria Limited, other textile mills are either dead or combining textile business with other forms of enterprise.

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.

There is a N100 billion Cotton, Textile and Garment Fund by government but players say funding is not the major challenge.

According to the Textile Manufacturers Association, about 85 percent of the $1.4 billion worth of textiles that flood the country’s market are smuggled, mainly from neighbouring countries.

“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.” A research report conducted by Martin Ike-Muonso, a professor, on ‘Discriminatory Margins of Preferences for Selected Manufacturers Association of Nigeria (MAN) Sectors’.