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Industry observation — can Nigeria’s collapsed textile industry be revived?

Industry observation — can Nigeria’s collapsed textile industry be revived?

2021 is a magical year and the most complicated year for the global economy. In this year, we have experienced wave after wave of tests such as raw materials, sea freight, rising exchange rate, double carbon policy, and power cut-off and restriction. Entering 2022, the global economic development still faces many unstable factors.
From the domestic point of view, the epidemic situation in Beijing and Shanghai is repeated, and the production and operation of enterprises are in a disadvantageous position; On the other hand, insufficient domestic market demand may further increase import pressure. Internationally, the strain of the COVID-19 virus continues to mutate and the global economic pressure has increased significantly; International political affairs, the war between Russia and Ukraine, and the sharp rise in raw material prices have brought more uncertainties to the future development of the world.

What will be the international market situation in 2022? Where should domestic enterprises go in 2022?
In the face of the complex and changeable situation, the Asia, Europe and America chapters of the “global textile in action” series of planning reports will focus on the development trends of the textile industry in countries and regions around the world, provide more diversified overseas perspectives for domestic textile peers, and work with enterprises to overcome difficulties, find countermeasures, and strive to achieve the goal of trade growth.
Historically, Nigeria’s textile industry mainly refers to the ancient cottage industry. During the golden development period from 1980 to 1990, Nigeria was famous throughout West Africa for its booming textile industry, with an annual growth rate of 67%, covering the entire process of textile production. At that time, the industry had the most advanced textile machinery, far exceeding other countries in sub Saharan Africa, and the total amount of textile machinery also exceeded the sum of other African countries in sub Saharan Africa.
e1However, due to the lagging development of infrastructure in Nigeria, especially the shortage of power supply, high financing cost and outdated production technology, the textile industry now provides less than 20000 jobs for the country. Several attempts by the government to restore the industry through fiscal policy and monetary intervention have also failed miserably. At present, the textile industry in Nigeria is still facing a bad business environment.
1.95% of textiles come from China
In 2021, Nigeria imported goods from China worth US $22.64 billion, accounting for about 16% of the total imports of the African continent from China. Among them, the import of textiles was 3.59 billion US dollars, with a growth rate of 36.1%. Nigeria is also one of the top five export markets of China’s eight categories of printing and dyeing products. In 2021, the export volume will be more than 1 billion meters, with a year-on-year growth rate of more than 20%. Nigeria maintains its status as the largest export country and the second largest trading partner to Africa.
e2Nigeria made efforts to take advantage of African Growth and Opportunity Act (AGOA) but this could not materialize because of the cost of production. With zero duty into American market it cannot compete with Asian countries who are to export into U.S. at 10 percent duty.
e3According to the statistics of the Nigerian Textile Importers Association, more than 95% of the textiles in the Nigerian market are from China, and a small part are from Turkey and India. Although some products are restricted by Nigeria, due to their high domestic production costs, they can not adapt to and meet the market demand. Therefore, textile importers have adopted the practice of ordering from China and entering the Nigerian market through Benin. In response, Ibrahim igomu, former president of the Nigerian Textile Manufacturers Association (ntma), said that the ban on imported textiles and clothing does not mean that the country will automatically stop buying textiles or clothing from other countries.
Support the development of textile industry and reduce cotton import
According to the research results released by Euromonitor in 2019, the African fashion market is worth US $31 billion, and Nigeria accounts for about US $4.7 billion (15%). It is believed that with the growth of the country’s population, this figure can be improved. Although the textile sector is no longer an important contributor to Nigeria’s foreign exchange profits and job creation, there are still some textile enterprises in Nigeria that produce high-quality and fashionable textiles.
e4Nigeria is also one of China’s top five export markets for eight categories of dyeing and printing products, with an export volume of more than 1 billion meters and a year-on-year growth rate of more than 20 percent. Nigeria continues to be China’s largest exporter to Africa and the second largest trading partner.

In recent years, the Nigerian government has supported the development of its textile industry in various ways, such as supporting cotton cultivation and promoting the application of cotton in the textile industry. The Central Bank of Nigeria (CBN) said that since the beginning of the intervention program in the industry, the government has invested more than 120 billion naira in the cotton, textile and clothing value chain. It is expected that the capacity utilization rate of the ginning plant will be improved to meet and exceed the lint requirements of the country’s textile industry, thereby reducing cotton imports. Cotton, as the raw material of printed fabrics in Africa, accounts for 40% of the total production cost, which will further reduce the production cost of fabrics. In addition, some textile companies in Nigeria have participated in high-tech projects of polyester staple fiber (PSF), pre oriented yarn (POY) and filament yarn (PFY), all of which are directly related to the petrochemical industry. The government has promised that the country’s petrochemical industry will provide the necessary raw materials for these factories.
e5At present, the situation of Nigeria’s textile industry may not be improved soon due to insufficient funds and power. This also means that the revitalization of Nigeria’s textile industry requires strong political will of the government. Merely injecting billions of Naira into the textile recovery fund is not enough to revive the collapsed textile industry in the country. People in the Nigerian industry call on the government to formulate a sustainable development plan to guide the country’s textile industry in the right direction.
                                                                                                                                                             ————–Articale source:CHINA TEXTILE

Post time: Aug-09-2022