Hope rises for dying textile industry

from the punch
More jobs may be created, in the textile industry, in addition to over 13,000 jobs already provided through the N100bn intervention fund, if government makes good its promise of another N500bn bailout by the end of the year, IFEANYI ONUBA reports

Prior to 2008 when Inuwa Yakubu lost his job in a textile firm in Kaduna, he used to be a vibrant young man full of vigor and optimism about having a successful career in that sector of the economy.

But with the myriad of problems currently facing the industry; all that is now history.

Yakubu was among over 700 people who lost their jobs in the Kaduna textile factory. And to keep body and soul together, he now ekes a living riding a tricycle in Gwarimpa Estate, Abuja.

“The textile industry used to be a sector where everyone wanted to work back in those days because our salary was not only paid regularly, it was also a bit high compared to what people in the civil service earned then.

“But things suddenly changed and many of the companies operating in the sector have to shut down their operations owing to the harsh economic climate. I was among those affected but I thank God that the little money I saved while working is now useful. I have been able to start up a business. And that is how I have been surviving,”  he said.

The situation is not different for Kingsley Njoku, who also lost his job in a similar circumstance.

Njoku, who used to be an employee of a textile factory in Ikorodu, Lagos, said he lost his job few months after his wife had their first baby.

But while Yakubu was lucky to have at least started a personal business to earn a living, such could not be said of Njoku as he still roams the street of Lagos in search of job.

In the last 26 years, no fewer than 776, 000 employees working in the textile sector have lost their jobs.

The once thriving textile industry, which used to be the toast of the Nigerian economy, is now a shadow of itself, owing to the closure of about 150 production mills.

The managements of the factories, it was learnt, decided to shut down the factories because of low capacity utilisation, high influx of cheap products and low exports.

This was confirmed by the Minister of State for Trade and Investment, Dr Samuel Ortom.

The minister, who spoke at a stakeholders’ retreat for the textile subsector, in Abuja, decried the huge number of job losses in the textile industry, saying the number of workers employed in the sector had fallen from 800,000 a few years ago to just 24,000.

The retreat with theme “Economic growth, wealth and job creation for Nigeria” provided the platform for stakeholders in the sector to brainstorm as well as develop policies that would aid the revamping of the industry.

Painting a gloomy picture of the sector, Ortom said Nigeria’s textile and garment industry, which had a fixed investment of $4bn (N640bn), used to be second only to South Africa.

He said, “Nigeria once had a very vibrant textile and garment sub-sector with fixed investment of $4bn second only to South Africa in Sub-Saharan Africa and was third largest in Africa.

“It also had 63 per cent capacity of textile manufacturing in West Africa and controlled 60 per cent of textile market in Nigeria.

“Within the same period, the subsector had 175 fully functional mills that employed over 800,000 people.

“Today, the reality has changed and the picture is no longer the same. Employment is at an all-time low level with 24,000 employees working in 25 functional mills that are characterised by low capacity utilisation as at 2008.

“This is further compounded by low export and high influx of cheap products.”

This scenario, the minister added, did not represent the global recognition of the textile subsector being a significant catalyst for economic growth.

Ortom said the Federal Government’s aspiration for the industry is to revive its job creation potential, thus contributing significantly to economic development.

He said, “Our aspiration for the subsector is to increase its share of domestic market from the present position of 12 per cent to 25 per cent by 2020.

“This increase is expected to create over 60,000 additional direct jobs and put food on the table for thousands of other Nigerians within the period.”

In order to achieve this, the minister, who chaired the event, said the strategy for the industry would be to revive its entire value chain.

This, he said, would be carried out in areas where the country had both competitive and comparative advantage.

For instance, he said the production of cotton for domestic utilisation and exports would be strengthened, adding that existing players in the sector would be supported to expand their current operations.

This, according to him, would help to attract strong brands as well as enable operators to set up local manufacturing plants in the country.

He blamed the deterioration in the sector on the weak linkages in the value chain, adding that the Industrial Revolution Plan for the textile sector would help to address all the weak linkages.

He gave the example of how the IRP had helped to revive the cement industry, which he noted had helped the country not only to save foreign exchange of about N210bn per annum, but also helped in creating about two million direct and indirect jobs.

He said, “For this sector, we are looking at all the value chains and the idea is to remove the obstacles and barriers to increased productivity.

“When you go through where we started from and where we are today, we should all be ashamed of ourselves. This is the time for us to think out of the box and start taking actions that would make this sector number one in Africa and number 10 globally.”

The minister said about 8,070 jobs had been saved through the disbursement of the N100bn Cotton Textile Garment Intervention Fund.

“This is the beginning of an important journey. We want to make this sector number one in Africa. It is not just about talking. We will come up with actionable points here to kick-start the needed revolution.

“We are already making progress with the reforms that are in place. Figures by the Manufacturers Association of Nigeria reveal that the capacity utilisation in this sector has increased significantly from 29.14 per cent in 2010 to 49.70 per cent as at 2011.

“In addition, a number of hitherto moribund textile mills have been reopened, about 8,070 jobs have been saved while over 5,000 new jobs have been created. We cannot continue to be a raw material exporting nation because by doing so, we are exporting jobs, development and wealth. This is one area that the Nigerian Industrial Revolution Plan is trying to address.”

But the General Secretary, National Union of Textile, Garment and Tailoring Workers of Nigeria, Mr. Isa Aremu, said in order to reposition the sector, the issue of funding must be given priority.

For instance, he said the current N100bn textile intervention fund should be increased to about N500bn and made available to the operators in the sector at a zero per cent interest rate, to be repaid within 20 years.

The intervention fund is currently being disbursed by the Bank of Industry. It has a repayment period of seven years with an interest rate of about six per cent.

He said, “There is need for affordable financing for the sector. For instance, the BOI intervention fund of N100bn though commendable needs to be increased to maybe about N500bn.