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Textile - Nigeria's Dying Goldmine
Source :   New Cloth Market 
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The Nigerian textile industry, which was once a vibrant sector of the Nigerian economy, is gradually grinding to a halt. Despite government promises to revitalise the sector that holds numerous potentials for the economy, not much has happened. Nigerians who are not aware of the forces that have brought the once flourishing industry to its knees are wondering what might have struck the sector. Fred Itua examines the factors behind the rot in the industry.


In any developed or developing economy, the indices used in judging growth is primarily based on the producing power of that country. Industries form the bulk of these indices. In Nigeria for instance, more than 80% of all finished consumer products are imported.


Nigeria relies more on import while its once vibrant industries are facing near extinction. The textile industry particularly attracts serious public debate basically because of the pivotal role it played in stemming the tide of unemployment between late 1950s and early 1990s.


The first modern textile industry in Nigeria, the Kaduna Textile Mill, started production in 1956. The primary reason for setting up the mill was to process the cotton being produced at the time, in the northern part of the country. By the 70s and the 80s, the Nigerian textile industry had grown to become the third largest in Africa. A report by the United Nations


University (UNU) for instance stated in 1987 that there were 37 textile firms in the country, operating 716,000 spindles and 17,541 looms. This was the golden period of Nigeria's textile industry. Between 1985 and 1991, it recorded an annual growth of 67%, and as at 1991, it employed about 25% of the workers in the manufacturing sector. Sadly, this once cherished national cash cow is now at the verge of collapse, due to a number of factors.


One of the factors that has become a thorn in the flesh of the industry has to do with fibre.

The MFA was a system of quota that could be imposed by developed countries on the amount of textile products that developing countries could export. This was interpreted largely as a protection of developed countries' textile industries from China.


The MFA was replaced by the WTO's Agreement on Textiles and Clothing (ATC) in 1995. Under these agreements, the textile industry was brought into full compliance with the General Agreement on Tariffs and Trade (GATT) rules, and all quota restrictions were rolled back by January 1, 2005. The quota restrictions were not applicable to some countries, one of which was Nigeria.


Reacting, a seasoned industrialist, Mr Victor Eburajolo, blamed the decline of the textile industry on the hasty accession of Nigeria to the WTO in 1995. According to him, in accordance with WTO rules, Nigeria had to remove any protection of the local textile industry, among others. He argued that it would have been better for the country to secure special arrangements with the WTO, such that the local textile industry would be protected until it was surer on its feet.


Before the expiration of MFA, the United States introduced the African Growth and Opportunity Act (AGOA), an initiative that opened up the American market to African countries.

 

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Published On Thursday, December 01, 2011
 
 
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