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Chinese imports strangling Nigerian textile sector
26
May '15
Nigeria’s textiles traders are a worried lot over the increasing Chinese footprint in the country. While the proliferation of Chinese-made textiles is a boon for low income consumers, traders in Kano, northern Nigeria’s biggest city and a centre of weaving and textile manufacturing dating back centuries, say such cheaper imports have been disastrous.

According to an agency report, factories have shut and trade in home-spun fabrics has dwindled, prompting calls for foreign investment within Nigeria rather than cheap, mass imports, as well as better regulation.

In the Kantin Kwari textile market — the largest in West Africa, the talk in the market is of unfair competition.

"The Chinese have effectively edged us out of business, leaving us with nothing but huge debts and heaps of goods in our shops," says Fatuhu Gambo who's business is one of many in dire straits. For the past two weeks he has not sold a single fabric in his shop

"The Chinese have taken over the importation and distribution of textiles in Kano and now they are into retail trading, which is putting our traders out of business," said traders' union head Liti Kulkul.

The troubles began a decade ago when Chinese textile merchants started the massive importation of textiles to Nigeria after Africa's most populous nation opened its doors to foreign trade.

The WTO deal gave the Chinese unfettered access to Nigeria's textile market, although Nigerian laws prohibit foreigners from retail trading. Traders talk of locals being recruited to conduct business on behalf of the Chinese in return for a cut of the profits.

The situation is just one aspect of the struggle facing Nigeria's crude-dependent economy, which has been hit hard by the slump in global oil prices since mid-2014. There is little domestic manufacturing to speak of, forcing goods from cars to foodstuffs to be imported.

"Our over-reliance on foreign products is hurting our economy and the only way to stop this trend is to tackle the problems in the manufacturing sector," said Sanusi, a former central bank governor.

Sa'idu Adhama, a former textile factory owner, said Nigerian traders cannot compete with their Chinese counterparts, who can get bank loans at single digit rates over a longer term.

"The Chinese are here legally, so we can't send them packing but we can regulate their trading," said Adhama, who studied in China in the 1970s.

That could include quotas, stricter enforcement of import regulations, duties and taxes as well as fuel subsidies to boost local manufacturing and help home-grown businesses, he added. Long-term investment in the power sector to stabilise the currently woeful electricity supply could also revive moribund factories, he said. (SH)

Fibre2fashion News Desk – India


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