According to Vanguard, Nigeria’s once-thriving textile industry is now gasping for breath following the failure of revival measures, a sustained upsurge in the importation of textile products, and a series of adverse monetary policy regimes.
Recall that Nigeria had a rich history of robust textile manufacturing with a large domestic market and significant exports to the West African sub-region from the 1970s to the 1990s. During this period, the textile sector contributed significantly to Nigeria’s Gross Domestic Product (GDP) and employment in the manufacturing sector.
At its peak around 1990, the industry boasted about 180 textile mills employing over one million workers. The sector also supported substantial backward integration with the cotton production value chain.
However, Financial Vanguard findings indicate that the decline set in around 2005, and the industry has struggled ever since, despite a growing market due to the rising population. Today, only about five textile mills remain operational, and the cotton production value chain has disappeared. The labor force has dwindled to fewer than 2,000 workers, both direct and indirect.
Industry stakeholders have attributed the collapse to several challenges, including:
- Large-scale smuggling and importation of textiles
- Inconsistent power supply in the power-intensive industry
- Inconsistent government policies on tariffs
- Insecurity across cotton production regions
- Foreign exchange crises and high cost of funding, making local products uncompetitive against imports
Despite federal government efforts to revive local production through protectionist policies, the textile industry continues to struggle. The Central Bank of Nigeria (CBN) has implemented various intervention programs, including financial support, training initiatives, and foreign exchange restrictions on textile imports at the official exchange market. However, these measures have not provided the necessary boost for the sector.