• Saturday, May 25, 2024
businessday logo


Nigeria’s textile industry needs market access, policy implementation to rebound- Kwajaffa

Nigeria’s textile industry needs market access, policy implementation to rebound- Kwajaffa

KWAJAFFA HAMMA, is the director-general of the Nigerian Textile Employers Association (NTEA), in this interview with GBEMI FAMINU, he spoke about the challenges in the textile industry, how it has overwhelmed manufacturers and how the industry can be revived. Excerpts:

The Nigerian textile industry was once ranked the second-largest in Africa, having over 250 factories all operating above 50 percent capacity with the use of home-grown cotton, but this has dropped significantly, what happened?

The textile sector although promising is bedeviled with numerous challenges that pushed the sector to where it is now and still continues to hinder its growth. The sector was challenged by smuggling, counterfeiting of textile materials, difficulty in accessing funds allocated to the sector, non-implementation of policies, poor patronage of locally made textile among many things.

All these put together frustrated textile makers who were forced to shut down operations and look elsewhere while those who tried to salvage the situation could not be competitive.

Smugglers are enjoying more, they don’t pay the kind of cost we pay and they conveniently flood the market with their products, sending trailer loads of goods into the market overnight

What are some of these challenges hurting textile makers?

First of all many textile firms have shut down, the remaining ones only produce when customized orders are made. Consequently, many of these companies have to downsize their workers causing a rise in unemployment. We cannot purchase raw materials like cotton leading to revenue loss for cotton farmers and we also cannot significantly contribute our quota to economic activities and growth.

How has the government reacted to the travails of the textile industry and its manufacturers?

The government has continued to roll out policies and executive orders in response to our plight but the problem is these policies lack implementation. For instance, we can effectively make uniforms for the military, paramilitary, and other security units, they have seen our work and are happy with it but yet we have not been called on to make anything for them despite the implementation of Executive Order 003.

Similarly, the Federal Government directed that a 10 percent import levy was paid on imported fabrics which were to be collected by the Nigerian Customs Service in order to develop operations of local textile manufacturers, till date, nothing has come to the coffers of textile manufacturers despite imports worth billions of dollars are being made annually.

The CBN and the federal government rolled out various funding interventions for textile manufacturers like the N100 billion Cotton, Textile and Garment Fund (CTG Fund) how has it been?

The intervention funds are loans not grants and we have to pay back but textile makers do not even produce and if they do they do not have a market for their goods, so if they take the loan, how will they repay it?

Read also: Private sector participation, government support crucial for Africa to harness AfCFTA benefits

What steps can be taken to revive the sector?

It starts with the implementation of policies, once the policies are effective things will change, we can regain our market from the grip of smugglers and counterfeit producers, we need our refineries to be active to aid an easy production process, we also need grants and adequate foreign exchange to bring in necessary raw materials and machines for production activities.

What plans does the textile industry have to benefit from the AfCFTA?

AfCFTA participation requires a level playing ground hence textile makers cannot effectively participate at this time because they do not have the ability to be competitive in prices despite making quality products. First, our overhead cost is high and sometimes we can’t break even locally.

What is the outlook for the 2022 business year?

Although we hope for a better year, but if government policies for the sector are not implemented and the challenges addressed, the narrative will not change and the sector’s performance will remain suboptimal and the manufacturers will remain idle while smugglers and producers of counterfeit materials have the upper hand.