China, India, Bangladesh, Vietnam and even Cambodia who are rapidly capturing the value added textile market

Nigeria unable to compete in African textile market despite AGOA
Business Day
Wednesday, 07 January 2009 00:01 AUSTIN IMHONLELE

The global textile and garment market is valued at around US $400 billion, which is an impressive figure that attracts entrepreneurs from around the world to venture into the sphere. Unfortunately for the African sub-continent and for Nigeria in particular, the trade has not been very profitable.

The situation in the Nigerian Textile Industry is alarming. Unless urgent steps are taken by the government, a total collapse is imminent.

Stakeholders in the sector had consistently lamented the unabated influx of counterfeit textiles from China, which they observed as the most serious problem afflicting the industry. There has been a sharp increase in the volume of textiles being smuggled in through the Nigerian land borders, particularly via Niger Republic.

The markets in Kano, Ibadan, Onitsha and Lagos are flooded with smuggled textiles which occupy over 80 percent market share.

Inconsistency in government policies has also been identified as one basic issue that needs to be resolved to revive the textile sector of the economy.

The problem of inconsistency in government policies is one basic issue that needs to be resolved, especially policies concerning the textile industry.

At a recent forum on the textile industry, experts pointed out that the market share of Africa in the global trade in textile and textile-related businesses, as estimated in June 2008, stands at a mere $200 million, which is indeed a very small fraction of the world trade.

Olarewaju, lamented the systematic and deliberate destruction of the Nigerian textile by unscrupulous Chinese textile exporters and called on the Federal government to engage the Chinese government over the issue.

Olarewaju alleged that counterfeited textile fabrics originate in China and specifically copy the trade marks of Nigerian textile manufacturers, ‘Made-in-Nigeria’ or ‘Made-as-Nigeria’ on the selvedge and even blatantly take SON/NIS markings to deliberately mislead consumers.
“While a large number of African countries are taking advantage of the opportunity thrown open by African Growth and Opportunity Act (AGOA) and other preferential trade concessions by EU, the Nigerian industry is still grappling to find a space in the international market.”

Nigeria has practically taken no initiatives towards taking this opportunity for expanding its textile industry. Even the availability of massive resources and cheap manpower could not help the country secure a place on the export charts.

If the situation continues in the present way and if measures are not taken to improve the market conditions, experts believe that by 2009, the entire chain of textile factories in the country would meet a disastrous fate.

On the global front, analyst say textile production is expected to grow to 25 percent by 2020 in which the Asian region is likely to be a major contributor. Abolition of quota regime since the start of 2005 has made the continent a hub for textile trade.

This is also because of most of the Asian countries instead of resorting to imports for their raw material supplies, opted for investing heavily in backward integration projects just like their counterparts in developed countries. This gradually strengthened the textile base in countries like China, India and Bangladesh.

As a result, most of the textile trade is concentrated in Asia and is being monopolised by countries like China, India, Bangladesh, Vietnam and even Cambodia who are rapidly capturing the value added textile market deserted by the developed nations due to high cost of production.
Issa Aremu, general secretary, National Union of Textile, Garment and Tailoring Workers of Nigeria (NUTGTWN) has urged the Federal Government to engage the Chinese authorities by drawing their attention to the serious damage caused by the trade malpractices of their textile exporters to the Nigerian economy. Federal enforcement agencies such as Customs and Standard Organisation of Nigeria (SON) should be tasked to take effective measures against faking and counterfeiting of Nigerian manufacturers’ trade marks.

Given details of the modus operandi of the dubious Chinese textile exporters, Aremu said: “Chinese companies violate intellectual property rights (IPR) of Nigerian textile manufacturers by specifically targeting popular Nigerian textile companies and counterfeiting their trade marks on the material produced in China and destined for the Nigerian market. Several Nigerian and international laws are broken to gain illegal market entry to the detriment of the Nigerian textile industry in particular and the economy in general. The faking of trade marks is done to mislead Nigerian consumers into buying counterfeits of genuine materials at cheap price by evading duties and taxes due to the government.

The textile industry had seriously been threatened in the past years by inadequate funding, invasion of local markets with foreign textiles and cotton products, high cost of production occasioned by epileptic power supply and high cost of Low Pour Fuel Oil (LPFO) that textile factories use for steam generation.

Within the last two years, more than half of the remaining 50 mills had further been shut down and the largest textile group in the country, the United Textile (UNT) was not immune from this closure.

The sector in the past was the largest employer of labour after government as it employed over one million Nigerians and secured a captive market of 250,000 tons of raw cotton for growers and generates over N1 billion revenue to the Federal Government of Nigeria. It was also a major consumer of a high percentage of local raw materials such as cotton and polyester.

The problem of inconsistency in government policies is one basic issue that needs to be resolved, especially policies concerning the textile industry. The problem of the industry has gone beyond money.

Stakeholders had in the past suggested that government should consolidate its commendable policy of ban by setting up a task force consisting of stakeholders to assist customs in ensuring effective implementation.

Address urgently and on a sustainable basis the energy problem as Nigerian industries are now generator-driven.

It cannot be over-emphasised that Nigeria is on the verge of de-industrialisation.
Mass factory closures mean complete wastage of irreplaceable manufacturing investment estimated at $3-billion.