In a dire development for Nigeria’s economy, the once-thriving textile industry is now facing imminent collapse despite extensive efforts to revive it. From its heyday as a major GDP contributor and employer in the manufacturing sector, the industry has dwindled drastically, with only a handful of mills operational today.
Historically, Nigeria boasted over 180 textile mills and employed over a million people in the sector by the 1990s. However, today, only five mills remain operational, employing less than 2,000 workers directly and indirectly. The collapse has been attributed to a myriad of challenges, including rampant smuggling and the importation of cheap fabrics, primarily from China, which flooded the market.
Efforts by the federal government, including protectionist policies and financial interventions by the Central Bank of Nigeria (CBN), have failed to stem the tide. Despite these efforts, imports have soared, accounting for 96.5% of textile products in Nigeria, exacerbating the industry’s woes.
The sector’s contribution to Nigeria’s GDP has seen a continuous decline, dropping from 2.02% in 2019 to 1.63% in 2023, with a negative contribution noted in the first quarter of 2024. This decline underscores the industry’s struggle to compete with cheaper foreign imports, compounded by inconsistent government policies and power supply challenges.
A significant factor in the industry’s decline is the influx of Chinese counterfeit fabrics, such as adulterated Adire, which have gained popularity due to their lower cost. This trend has further undermined local production efforts, despite initiatives to enforce Executive Order 003 aimed at promoting locally-made goods.
In response to the crisis, the Manufacturers Association of Nigeria (MAN) has criticized the Central Bank’s tight monetary policies, which it claims have reduced the competitiveness of Nigerian products globally. The association has called for more supportive measures to enable local industries to thrive.
Looking forward, the federal government has unveiled a $3.5 billion revitalization plan in collaboration with development partners and the private sector. This initiative aims to create 20,000 jobs and revamp the cotton, textile, and apparel industry, signaling a renewed effort to restore Nigeria’s former textile manufacturing prowess.
As stakeholders and policymakers grapple with the complexities of revitalizing the sector, the future of Nigeria’s textile industry hangs in the balance, with hopes pinned on sustained government intervention and a favorable economic climate to reclaim lost ground and secure a sustainable future for local textile production.
This development underscores the urgent need for comprehensive reforms and strategic investments to revive one of Nigeria’s once-vibrant economic sectors amidst a challenging global economic landscape.
