Fuel & power price hike hurts Nigerian textile sector

25 Aug '12

2 min read

The recent hike in prices of petroleum products and electricity tariffs has increased the cost of textile production in Nigeria, according to the Nigerian Textile Manufacturers Association (NTMA).

Speaking to fibre2fashion, NTMA’s Director-General, Mr. Jaiyeola Olanrewaju stated, “Price of Low Pour Fuel Oil (LPFO) is increased by 26 percent, while electricity tariff is increased by 50 percent. This automatically increases the cost of textile production.”

The Nigerian textile sector is struggling despite some assistance extended by the Government. Mr. Olanrewaju says, “The Government's effort to revive the textile industry in the country by providing some soft loans is not yet yielding the expected result. A lot of challenges still need to be addressed, especially, the reduction in cost of production, which had made the Nigerian textiles uncompetitive compared to foreign ones.”

“The Nigerian textile industry is at its lowest ebb and the local manufacturers are facing several issues due to the high priced fuel and electricity, as well as competition from the fabrics brought from foreign nations. Hence, the Government should address these issues first in order to find a solution to the problems bothering the sector,” he avers.

Suggesting how the Government’s active intervention can help the situation, he opines, “The Government could ease various taxes on the textile industry and subsidise the industry's expenses on consumption of petroleum products, such as LPFO, as well as gas and electricity consumption from the national grid.

“If the Government really wants to revive the textile industry in Nigeria, it has to subsidise the cost of production to enable Nigerian textiles to compete with foreign fabrics. The Government should also curtail the level of influx of foreign textiles into the country,” he concludes.

Fibre2fashion News Desk - India

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