Reviving the Textile Industry

By Hajiya Bilkisu (mni)

The spacious entrance area of the Kaduna Trade Fair Complex was crowded
as traders displayed their wares to attract buyers. Assorted imported fabrics,
mainly guinea brocade known as shadda and other plain fabrics for men,
wrist watches, pen, shoes etc were among the items on display. I remarked
to a friend, Hauwa as we were about to enter the hall that the traders were
part of the problem we were about to discuss. I then looked at the fabric
most of us were wearing and since they were not locally made, I told her that
perhaps we were also part of the problem and she laughed!!
Last Saturday, the Kaduna based Arewa Media Forum organised a seminar
on an issue that has generated so much concern but which the government,
captains of industry and the labour unions have not been able to address
effectively. The collapse of the textile industry in the Northern States and the
effects of this on the economy of the region. The Arewa Media Forum AMF
is a Non Governmental Organisation established by journalists, newspaper
proprietors and stakeholders in journalism practice in Northern Nigeria. The
NGO has been policy fora and organising interviews with policy makers on
various topics to enlighten the public.
The Chairman of AMF, Malam Mohammed Haruna, and Managing
Director of Kaduna based Citizen Communications welcomed participants to
the event. He informed the audience that the choice of the topic, and the
decision to organise the seminar was taken last year at one of our meetings
where the forum discussed the neglect of agriculture, the poor industrial
base, the closure of factories and the low capacity utilisation of existing ones
in the northern states. In 1949, Alhaji Ahmadu Bello, the Sardauna of
Sokoto and Premier of Northern Nigeria had a vision for the industrialization
of the region. He established the Kano Textile factory in Gwammaja, Kano
and the Kaduna Textile Mill KTL to use the abundant cotton produced by
farmers in the region. Kano became a textile marketing city and Kaduna also
developed into a textile city as other factories and support services, such as
the spinning and weaving industries blossomed. Marketers of Kaduna made
textile materials; mainly African prints atampa also carved a niche for
themselves selling these products locally and exporting to neigbouring
countries. Sadly in the past decade, we watched with concern as one textile
factory after the other closed shop. The last factory that closed last year was
the United Nigeria Textile UNTL which used to produce fine wax that was a
good match for any imported brand. The closure of textile factories was not

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limited to Kaduna but was repeated in Funtua, the headquarters of the cotton
production belt, Kano the commercial centre of Northern States and Lagos
the nation’s business capital.
What were the causes of this closure? This was properly articulated by
all the resource persons at the seminar. Senator Walid Jibrin, the Vice
President, Manufacturers Association of Nigeria MAN in his paper titled
Reviving the Textile Industry in Nigeria gave a historical overview of the
development of the sector, its contributions to the economic development of
the country, the problems being encountered and the way forward. Senator
Walid identified the following as some of the factors responsible for the
collapse of the textile industry. Inconsistency in government policies, lack of
protection of nascent home industry due to globalization and liberalization
policies, high interest rate, smuggling and dumping of cheap Chinese wax
and African prints, power crisis and high cost of fuel which have led to sharp
rise in cost of manufacturing.
He listed some of the contributions of the textile industry to the economy.
They include being the second largest employer of labour after the
government, about 2 billion naira derived by government as taxes and levies,
providing source of livelihood to over 1,750,000 cotton growers etc.
In his presentation, Alhaji Saidu Dattijo Adahama, the Chairman of
Adahama Textile and Garment Industry in Kano, underscored the need to
revive the textile industry which has huge potentials. Given Nigeria’s huge
population, there are basic requirements of citizens for fabric which must be
met. Some of these are provision of uniforms for pupils and students of
various institutions from nursery, primary to secondary level, uniforms for
professionals such as the military, paramilitary organisations, medical
workers, industrial garments, corporate wear, under wear, t-shirts, baby
dresses, beddings, sports wear e.t.c. Alhaji Saidu however observed that
neglect of the textile sector has rendered it vulnerable to smuggling. He
made an interesting analysis which showed that Nigerian industrialists have
not made investments that will ensure that local industry produce enough
fabrics to meet the needs of our growing population. In such a situation,
smuggling is used to fill the gap between demand and supply.
His research showed that even if all the textile factories in the country were
working at full capacity, they would not be able to meet the needs of the
citizens. Using Kano as an example, he calculated the fabric requirement as
follows:
Kano has a population of 10 million and assuming that every member of a
household will require three sets of clothing in a year and each set is 10
metres, the average annual requirement will be 30 metres per person. Thirty

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metres for 10 million people comes to 300 million metres. With a population
of 140 million, Nigeria will need 4.4 billion metres of fabric. This makes
smuggling attractive and profitable because the unmet need exists. He
recommended that government private sector partnership should support the
establishment of mega textile industries in Gombe and Funtua, the major
cotton growing zones of the country. He also recommended that micro
finance banks should also be established in major textiles markets nation
wide. Garment production industries should be established alongside
tailoring institutes in each of the nineteen northern states. The 24
commercial banks should also replicate the United States NEXIM banks in
reviving collapsed economic sectors in Nigeria. Many of those who
contributed to the discussions blamed the oil boom for the neglect of the
agricultural and industrial sector and the country’s over reliance on crude oil
as the major source of revenue.
Several stakeholders, among them the President of MAN Alhaji Bashir
Borodo, Comrade Wahid Umar the NLC President, made significant
contributions which space constraints will not allow me to include in this
write up. In his contribution, Comrade Adam Oshiomhole, former President
of the Nigeria Labour Congress and Governor of Edo state said about 28 000
workers, their dependants and suppliers were affected by the closure of
textile factories. He lamented the lack of political will to combat smuggling
and asks “if we can fight drug export because Americans tell us to do it, why
can’t we fight smuggling of fabrics because of the harm it does to our
economy? The rule of law must be extended to smugglers” .Malam Issa
Aremu, the Deputy President of NLC and National Secretary of the National
Union of Textiles and Garment Workers reminded us that we should not be
intimidated by China but should rather emulate China in the way it has been
able to expand its export market and the in roads it has made into the world
market. He recalled that the Sardauna of Sokoto had foresight and refused to
be intimidated by the progress made by more technologically developed
countries. Rather, he invited them to be partners and co-invest with the
government of Northern Nigeria. This according to Malam Issa laid the
foundation of the industrialization of the region.
At the Arewa Media Forum, our decision to organise a seminar on
the state of the textile industry was discussed in October last year when the
closure of UNTL was announced. Some of us had read the newspaper
reports of the event. I was also privileged to read a special report on it in an
internet circulated edition of Governance Watch, a publication produced by
the Abuja based Passion Consult, managed by a social analyst and labour
expert Malam Salihu Lukman. I drew the attention of my colleagues to it.

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Titled The Nation's Industrial Crisis: Any Hope for an End? It undertook
an analysis of the 43 year old UNTL and its contributions to the economy
and the effects of the closure on livelihood and government’s revenue
generation drive. Salihu observed that with total share volume of
894,724,027 valued at N2.53 each, turnover of N13.9billion and N14.4
billion in 2005 and 2004 respectively, corresponding profit after tax of
N170.6 million and N194.7 million during the same period, the contribution
of the industry made substantial contributions to the economy.
The company, in the press statement announcing the closure, said it 'could
no longer bear the harsh economic condition prevailing in the country',
stressing that it 'had suffered losses of over N1.3bn in the past two years. In
2006 alone, the company lost over N700m, and in the first quarter of this
year, recorded N650m loss.' Apart from producing textile products (African
prints and wax), it provided direct employment to at least 4,000 citizens, in
addition to others providing services to workers, costumers and the company
such as food sellers, etc. It also provided veritable source of revenue to the
local, state and federal governments. Already, the Nigerian Textile
Manufacturers Association (NTMA) argued that the industry, which used to
be the second largest employer of labour after government has lost 577,000
workforce between 1992 and 2006.
Out of 170 companies, about 149 textiles were reported to have shut down.
Lukman’s analysis then highlighted the major problems facing the industry
which of course were the same as those mentioned by our resource persons
during their presentations. They include the trade liberalisation policy of the
Federal Government, which produced poor economic climate leading to
higher cost of industrial production. Globalisation further
worsened the crisis because of complete removal of all forms of trade
restrictions leading to unrestrained imports of all kinds of
products. The consequence is diminished market for locally manufactured
products that today accounts for only 27% share of the
local market. Globalisation also led to massive dumping, which for textiles
alone, was estimated at about 200 containers per month or 200 million
metres valued at US$20 million. In August 2002 the Federal
Government announced temporary suspension of textile imports.
Administrative lapses hindered enforcement and therefore
weaken the impact of the measure.
Other opportunities that would have boosted industrial potentials especially
that of the Nigerian textile industry such as the US African Growth and
Opportunity Act (AGOA), introduced by the President Bill Clinton
administration, aimed at expanding exports from Africa, did not receive the

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required priority by the Nigerian government. In spite of the reported
increase in the volume of imports from the US to Nigeria, which rose from
N62,838.6 billion in 1996 to N90,068 in 2001, the inability of the National
Assembly to pass enabling act that would allow Nigerian products,
particularly textiles to take advantage of AGOA and access the US market
was a major impediment.
The complete collapse of social and physical infrastructure also compounded
industrial problems in the country. For instance, electricity supply dropped
to about 1,300 megawatts in 1998 resulting in very unstable
power supply. This negatively affected industrial production with many
manufacturing industries having to provide alternative sources of power,
mainly generating plants with additional costs for fuel. This is further
compounded by protracted fuel crisis and the high costs and shortage of
LPFO, otherwise known as black oil. When all this is weighed against the
alarming corruption in the power sector as revealed by the House of
Representatives probe of the power sector, it becomes clear that corruption
and bad governance is at the root of the country’s economic crises at every
level. The link must therefore always be made between corruption and
economic management .Even the problem of smuggling is fueled by
corruption since the country’s Custom Service is grossly inefficient.
Smugglers do deals and ‘buy’ exit time when the officials look the other way
as smugglers move their goods into the country. We also heard stories of
smugglers who have become barons who are above the law!!
NTMA estimate that about 60% of the 40 million metres of wax fabric
imported into the country monthly found their way to Nigeria through
smuggling.
As a citizen who spent a substantial part of his life in Kaduna within the
labour movement, Lukman’s analysis lamented that the closure of UNTL
resulted in huge financial losses for governments at all levels. The particular
case of UNTL is reported to have resulted in the loss of N50 million
monthly for electricity, N30 million Value Added Tax and
N60 million Custom duties. The state government is said to have lost about
N30 million employee tax, in addition to not less than N10 million to
Kaduna State Water Board.
Government has made attempts to respond to the crisis in the textile sector
and in 2007, the federal government launched a N70 billion Naira Textile
Development Fund to finance new investment in cotton and textile sectors. It
was projected to generate N60 billion annually and create 200,000 jobs for
youths. A Presidential Committee on the Revival of the Textile Industry to
address the industry's decades of decline was set up and charged with the

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responsibility of commissioning a study on the state of the industry and to
formulate a financing package for the revival of the Nigerian textile
industry. NEXIM and the Project Managers (Osprey Investments Group
Limited) were assigned the responsibility of implementing a package of
financial and programme assistance to the cotton and textile industries to
improve performance and competitiveness in the domestic and international
markets.
The Textile Development Fund was designed to be on-lent to companies
subject to approval of the beneficiary's business and financing plan as
follows: N50 billion Textile Financing Facility of the Textile Development
Fund will provide investment finance for companies that seek to refinance
high cost debt, replace and upgrade textile production lines, renew stocks of
spare parts and acquire new technology. This facility will also be available
to part-finance the establishment of new businesses in the garment and
finished textile products sectors. The N20 billion Cotton Financing Facility
of the Textile Development Fund will provide fixed and working capital for
the cotton production sector. Fixed capital will be needed to enable ginneries
to upgrade gins, presses, transport and other equipment and to expand
process capacity where required. Working capital will be required for seed
cotton purchases but also to provide inputs and other support to farmers.
What has happened to the N70 million Textile Development Fund? There
have been reported conflicting claims about the situation. The Yar’ Adua
administration, especially with its welcomed ambitious Vision 2020, these
must speedily address in order to rekindle hope for industrial development of
the country. Salihu believes, and rightly too that a situation where industries
crumble like pack of cards will be the major impediment to any national
development agenda.