Wednesday, November 30, 2022

What Peter Obi can achieve by reviving the textile industry

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Peter Obi, the Labour Party candidate for the 2023 presidential election recently disclosed that he intends to revive the cotton textile and garment industry as part of his grand economic revival plan for Nigeria.

Obi’s inclination to revive the textile industry is understandable because, at some time in the economic history of Nigeria, the textile industry was a major employer of labour (second only to the government) and a leading contributor to Nigeria’s GDP.

The industry was a vital and vibrant part of the Nigerian economy in the 1980s and early 1990s, contributing significantly to the nation’s foreign exchange earnings. At its peak, the textile industry absorbed more than 500,000 workers.

To put things into context, the Nigerian Textile Manufacturers Association (NTMA) revealed that over 117,000 jobs in the nation’s textile industry have been lost in the past 26 years. According to the association, the industry could lose more jobs if the federal government does not intervene urgently to salvage the ailing industry.

NTMA President, Mr Folorunsho Daniyan, said that membership of the association shrunk from 175 firms in 1985 to less than 20 in 2022. The reason, according to Daniyan, is a lack of competitive edge.

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Factors militating against the industry

On the major factors responsible for the industry’s declining export capacity, Daniyan narrowed them down to the loss of preferential market access in the EU and US, inconsistent implementation of the Export Expansion Grant (EEG) policy, particularly a perennial backlog of EEG claims, and the inconsistencies in the implementation of ECOWAS Trade Liberalisation Scheme.

Textile industry too valuable to be ignored

Recall that the former national chairman of the All Progressives Congress (APC), Mr Adams Oshiomhole, who has years of experience in the textile industry, had said if properly repositioned the CTG value chain would be a potential ‘gold mine’ for the country.

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  • Oshiomhole argued that if revitalised, the sector could attract Foreign Direct Investment (FDI) for massive industrialization in the country.
  • According to him, the CTG Value Chain has been a vital and vibrant part of the Nigerian Economy in the 1980s and early 1990s.

Nigeria’s textile products are still in huge demand within the ECOWAS region and major cities across Europe and the USA. Victor Udom, an expert who has been in the industry for 23 years, told Nairametrics that the industry could be a big foreign exchange earner if it is revived.

Experts speak on what must be done

A major stakeholder in the CTG industry, Mr Paul Sunday Achimugusaid:

  • To revitalize and reposition the Nigerian CTG sector, the following important decisions and actions must be taken and followed through by the government and the CTG stakeholders: Government must provide special tariff power; that is, gas and other energy sources for the CTG sector.
  • “There must be re-tooling for obsolete machinery, more aggressive and tighter control at the Nigerian borders to reduce the smuggling and influx of second-hand clothing, engagement with China at governmental level, special treatment for the CTG sector in terms of tax, finance and so on.”

The Chief Executive Officer of Anthill Concepts Limited, Dr Emeka okengwu, told Nairametrics that for anyone to revive Nigeria’s textile industry he or she would have to give attention to the power sector. He said the textile industry is energy-intensive, as textile factories run 24 hours.

  • Okengwu also said it would be easier to use petrochemical products to produce polyester and polymer as raw materials as opposed to organic raw materials, considering how time-consuming and expensive agro-raw materials are.
  • He, however, said it is foresight to consider reviving the textile industry because the industry is potentially a huge employer of labour.

Also speaking to Nairametrics on the issue, Professor Tayo Bello of Adeleke University said any Nigerian president who revives the country’s textile industry would be creating massive job opportunities.

  • However, Bello cautioned that Nigerians should be under no illusion that the industry can be revived in the absence of adequate power supply, stressing that adequate power supply would give Nigeria the competitive edge she needs.
  • Bello stressed that many factories have been turned into entertainment centres due to a lack of power. He stated that reviving the textile industry would transform the economy, but noted that the country would not be competitive without an uninterrupted power supply.

 

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