Nigeria’s total non-oil export earnings from more than 25 commodities in 2018 was $3.3 billion (N1.19 trillion), according to the National Bureau of Statistics (NBS), but Bangladesh, once one of the poorest countries on earth, earned almost ten times as much as that from exporting one product — textiles.
India earned $37.4 billion from exports of textiles and cotton in 2017. Total textile and clothing exports between April and September 2018 stood at Rs. 1.30 trillion ($18.56 billion), according to public data.
Bangladesh has 5,000 garment factories, employing about 20 million people, mostly women, which pushed the extreme poverty in the Asian country down to 12.9 percent, according to the World Bank, compared to Nigeria’s nearly 50 percent.
Yale economist Ahmed Mushfiq believes that Bangladesh’s recent economic success is in part attributable to the flourishing garment manufacturingindustry.
There were things Bangladesh did right. The South Asian country de-emphasisised the primary product—cotton— and paid attention to the entire textilemanufacturing value chain. The raw material for yarn is cotton but in Bangladesh only five percent of cotton needs are met by local production and the rest are imported, according to an SNV report done by the Kingdom of the Netherlands.
For knit products, 80 percent of the yarn requirements are met by domestic suppliers because the country has a competitive advantage in that area. However, only 20 percent of the woven requirements for the garment sector is catered by local firms.
The country’s parliament passed a bill specifying the level of quality which all export firms must meet in order to beat China to number one in competitiveness. Hence emphasis was laid on competitiveness, with the government providing market access for companies through trade negotiations targeted at removing international barriers.
More so, some of Bangladesh citizens were sent to China and Europe to acquire the skills needed to run the mills.
Again, the country paid a closer attention to the use of modern technology to lower costs and save the environment.
Big brands such as Walmart, H&M, Benetton, Gap and Zara were lured into distributing Bangladeshi ready-made garments.
Stitch Dairy, a local Bangladeshi publication, said that that the South Asian country was able to enjoy duty-free advantage to export garments to the European Union, the US and Malaysia.
Experts equally attribute Bangladesh’s success to a convivial business environment with minimal government influence and low taxes, which attracted Chinese and Vietnamese firms to Bangladesh.
Textile Today reported in 2015 that firms from Singapore, Japan, Taiwan and South Korea, which had traditionally relied on low-cost production in China, were shifting out of China and making their way to Bangladesh as a result of well developed Bangladeshitextile value chain that guarantees three to five years return on investments.
Another key factor in Bangladesh is cheap labour with minimum monthly wage of a garment worker at $197, which makes it the last but one lowest wage among 21textile-making countries in the world.
However, Nigeria has even more advantage than Bangladesh in terms of labour cost as its recent minimum wage hike to N30, 000 amounts to only $83.3 per worker.
“Export Subsidies are policy tools to encourage exports of a nation. The government of Bangladesh provides cash incentives as export subsidies, amid other supporting policies, to promote exports in various business sectors. There is no alternative to the export-led growth of the economy to achieve its goal of becoming a middle-income country by 2021,” said two researchers, Afsana Arafin and Belalur Rahman, in a paper entitled, “Cash Incentives for Export Oriented Industries of Bangladesh: A Critical Evaluation’.
However , the number of full-fledged textile mills in Africa’s most populous country has whittled down to two, from over 180 in 1985. Industry players say the number of players is 24, but findings show that most of them are manufacturers of rugs, handkerchiefs, sweaters, towels and stockings.
“Some of the mills have even gone into receivership as they could not repay their loans. The lesson is that we should deal with the fundamental issues of production competitiveness in our economy. The textile industry needs to be saved from the excruciating burden of high operating and production cost,” Muda Yusuf, director-general of the Lagos Chamber of Commerce andIndustry (LCCI), said.
In India today, raw materials for textiles are available. The population is helpful as it provides a ready workforce for the industry. But cost of power is cheaper in India than in many other textile export countries, which makes production cheap. There is also increased investment in research and development, with technology playing a major role. Like in Bangladesh, the government of India provides incentives for exporters and manufacturers and encourages them to enter new markets.
According to Textile Today, there is massive support from central and state governments in the form of textile parks, research centres, international collaboration with foreign institutes and laboratories, training facilities, all of which are playing a significant role in the sector’s progress.
In Nigeria, in contrast, analysts say no textile firm can survive due to issues around smuggling, high production cost and penchant by government agencies that are now ‘revenue raisers’.
Smuggling has turned textile hubs in the main cities of Kano, Kaduna and Lagos into solitary camps and event centres, the Manufacturers Association of Nigeria (MAN) said.
“The hitherto manufacturing hubs in Kano, Kaduna and Lagos are now solitary camps with most of their factory sheds now used as event centres and warehouses to store smuggled textile materials,” MAN, which is an association of over 2,500 manufacturers in Nigeria, said in its review of 2018 performance of the sector.
Hamma Kwajaffa, director-general of Nigeria Textile, Garment and Tailoring Employers Association (NTGTEA), told BusinessDay that the problem is importation and smuggling.
“The level of importation and smuggling in this country are killing the few surviving companies. They used to run three shifts but they have closed down these shifts.”
“The Executive Order 003, for instance, has been pronounced, but it is not being implemented. So we have low patronage in the industry,” he added.
There are textile mills in Nigeria, but many of them no make caps, sweaters, polos and stockings.
ODINAKA ANUDU
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