The plan by the Federal Government to create three million new jobs in the textile industry is an ambitious one which can only be actualised if there is a strong political commitment to the achievement of the objective. This is so because no fewer than 145 Cotton, Textile and Garment (CTG) mills across the country have collapsed since independence in 1960. The government will have to put on its thinking cap and devise effective measures to breathe new life into the promising CTG sub-sector, which President Muhammadu Buhari has resolved to make a fulcrum of his job creation drive.
The Minister of State for Industry, Trade and Investment, Hajiya Aisha Abubakar, is not unmindful of the big task the government has set for itself. She told a recent stakeholders meeting of the CTG Implementation Committee in Abuja that the optimism of government may be misplaced as all the mills have become a shadow of their old selves. Only about 30 of the mills are functional at the moment.
The minister’s position is a reflection of the many serious problems facing the CTG sub-sector in the country. It is, indeed, regrettable that the textile industry, which used to be the second biggest employer of labour, has virtually collapsed.
There are many factors responsible for the sorry state of the textile industry in the country. These include the instability of power supply, high cost of production, competing cheap textile imports from Asian countries and the uncontrolled smuggling and dumping of sub-standard textile materials in the country. Sadly, very little has been done to address these problems.
It is disheartening that in spite of the huge potentials of the sub-sector, especially with regard to the creation of jobs and the growth of the economy, there has not been much evidence of commitment to their actualization. The institution of a N100 billion Intervention Fund for the industry by the immediate past government in 2010 did not do much to bring the CTG sub-sector back to its feet. That initiative was managed by the Bank of Industry (BoI).
Although the past administration claimed that it saved 8,070 jobs and created 5,000 new ones through the disbursement of the fund, figures from the Manufacturers Association of Nigeria (MAN) revealed that capacity utilisation in the sector increased only marginally. Also, only 38 textile firms were said to have benefited from the fund.
Undoubtedly, the CTG industry is in urgent need of a revamp. It is a labour-intensive sub-sector which employed hundreds of thousands of Nigeria at its peak and it can still do so if it is repositioned and strengthened. What is required is a detailed government policy that will address the constraints hindering the operations of the firms. This has become more urgent in view of the nation’s current economic challenges that require diversification of the economy and the development of other alternatives to our mono export product, crude oil. The battle against smuggling and indiscriminate dumping of foreign fabrics in the country should be intensified. In that regard, the Nigeria Customs Service (NCS), Nigeria Immigration Service (NIS), The Central Bank of Nigeria (CBN), the Standard Organisation of Nigeria (SON) should forge a formidable team to protect and promote the subsector. A sub-sector that once employed over one million Nigerians should not be allowed to collapse. What is required is a deliberate effort to find lasting solutions to the problems plaguing the industry.
Access to funds at minimal interest rate is key to resuscitating this industry. Last year, the CBN raised glimmers of hope for the ailing industry when it floated a N300bn Real Sector Support Facility (RSSF). According to the apex bank, the RSSF attracts an interest rate of nine percent per annum payable on a quarterly basis. We think the interest rate should be reviewed downwards to about 3 percent. The guidelines for the facility also state that the fund would be used to support large enterprises for start-ups as well as business expansion requiring up to N500 million upwards, to a maximum of N10bn.
Targeted by the facility are firms in the manufacturing and agricultural value chain sectors, as well as selected service sub-sectors. With Nigeria’s huge population, our textile industry can be formidable. While finance is crucial to the revival of the sub-sector, a good business environment, special incentives like tax holidays, provision of adequate infrastructure, stable power supply and the patronage of made-in-Nigeria fabrics can be used to boost the fortunes of the sector.
These measures should be backed with restrictions on the commercial importation of ready-made garments and fabrics that can be produced in Nigeria.