The once flourishing cotton-textiles-apparel industry of Nigeria collapsed once the oil industry grabbed centrestage and Chinese imports started flourishing in the market. Jozef De Coster reports.

The buzz may be over, but governments and companies alike still pay due attention to the 'industrial cluster' theory. This theory essentially says that for companies of any sector it's a big advantage to be part of a cluster of mutually competing manufacturers, specialised suppliers and supporting institutes (research centres, schools, inspection services, transport companies, etc). In many countries the textiles and apparel sector greatly benefits from the existence of clusters. But just like individual companies, clusters too are vulnerable. That's a lesson that the West African country Nigeria has recently learnt in a painful way.

Since 2014, Nigeria, and no longer South Africa, is Africa's largest economy. The country has nearly 200 million inhabitants who don't care too much about sur-population (by 2050 the Nigerian population is predicted to surpass that of the United States). Being a cotton producing country, it was obvious that Nigeria would be represented at the 16th Annual Congress of the African Cotton Association (ACA), which took place from March 13 to 15, 2018 in Abuja, the political capital of Nigeria.

Anibe Achimugu, CEO of the company Arewacotton and national president of Nacotan, the National Cotton Association of Nigeria, started his address to the gathering by reading a quote from the Financial Times of London of February 13, 2015, on the Nigerian cotton and textile industry: "Oil should have made the country rich. Instead, it has distorted its economy, corrupted its political class, paved the way for Boko Haram and killed off a thriving textiles industry."

Phantom cities

According to the president of Nacotan, employment in Nigeria's textiles and apparel industry plummeted to 20,000 people, from 600,000 two decades ago. Most of Nigeria's textiles mills, in the cotton and textiles capital Kaduna, shut down. Many textiles and apparel workers lost their means of livelihood without any hope to find another use for the skills they had built up in the sector. Achimugu compared the collapse of the Kaduna textiles cluster with that of Detroit's automobile industry.

What was the cause of the demise of the Nigerian textiles and apparel industry, which in the past was rated the second largest in Africa after that of South Africa? Could a better sector strategy have saved the industry? Achimugu did not publicly examine the role played by the private sector and the Nigerian government. He referred to two external factors: the damage done by the "pernicious economic policies of structural adjustment" and "the Chinese contraband."

The double-headed Chinese dragon

The Nacotan president views the role of China, as a major actor in the textiles and apparel sector, as a dragon with two heads. First, there's China's highly competitive manufacturing sector that has devastated many smaller-scale rivals across Africa, Asia and Latin America while implementing Beijing's global strategy and pursuit of global ambitions, with growing dominance in global trade. Second, Achimugu explained, there's the Chinese contraband that has so thoroughly captured the Nigerian market that it would be impossible for the Nigerian operations to compete.

How is this contraband working in Nigeria? According to Achimugu, Chinese fabrics are now fraudulently labelled 'Made in Africa'. This used to be a hidden international trade, but today it's open. The Chinese imitation fabrics come through Cotonou (in Benin Republic), one of the largest ports in West Africa, then undergo transshipment and are smuggled into Nigeria. This trade is estimated to be worth about $2 billion a year, equivalent to about a fifth of all annual recorded imports of yarn, fabrics, textiles and clothing into the whole of Sub- Saharan Africa. Achimugu said: "No wonder that a team of experts working for the United Nations had in 2009 concluded that the Nigerian textiles industry was on the verge of a collapse."

How to rebuild the sector?

Nigeria is too big an economy and has too many people who need to be clothed to accept its current dwarf status as a cotton, textiles and apparel producer. Achimugu thinks that a lot of measures can be taken to build a strong, sustainable sector.

  •          The respective roles of the government and the private sector should be reviewed. Achimugu argues that the liberalisation of the cotton and textiles industry, in Nigeria and other African countries, has contributed in no small measure in leading it down the slope. Should functions like R&D, imposing standards, supply inputs, etc, not better be re-transferred to state corporations?

  •          The establishment of world class cotton seed processing plants should be facilitated. The Nigerian cotton industry suffers from the lack of quality cotton seed. The government should provide R&D and adequate financial support for farmers for seed production programmes to be implemented.

  •     Collaboration through public private partnerships. To tap into the combined strength and the possible synergies between the public and private sectors, a collaboration is very much needed. Achimugu encourages the Nigerian textiles and apparel industry to influence decisions in several important areas like price fixing, quality standards, protection of the environment and sustainable production.

  •        The creation of an All-African Platform. Achimugu argues that the cotton, textiles and apparel value chain in Africa needs a robust platform for knowledge sharing and for the solution of problems with trans-boundary impacts. In the quest for efficiency and diversification, the cotton industry in the whole of Africa should cooperate to find, for example, a better use for co-products of cotton processing, like cotton seed oil for cooking, cotton seed cake for feeding livestock and cotton seed shell for power generation.

Look at India

According to the Nacotan president, African countries wanting to develop a flourishing cotton-based textiles and apparel industry should look at India, the largest cotton producer in the world and the second largest textiles producer after China. At the ACA Conference, Achimugu said that India recently announced an incentive package for the textiles and apparel industry aiming at creating 10 million jobs in three years.