Textile importation ban puts N10 trillion industry in danger

• CPPE urges competitiveness reforms over import restrictions

The resolution by the Senate to ban outright importation of textile will put an industry valued at N10 trillion annually on the brink of collapse, including the livelihoods of an estimated 10 million Nigerians provided by the sector.

This was the submission of the Chief Executive Officer, Center for the Promoton of Private Enterprise (CPPE), Dr. Muda Yusuf, while reacting to the Senate’s resolution calling for a ban on textile fabric imports.

Noting that the proposed measure is unlikely to achieve its intended objectives and could have significant adverse consequences for the Nigerian economy, Yusuf said that instead, the Senate should consider reviving the textile industry, which requires a comprehensive value-chain approach rather than restrictive trade measures. To this end, priority he said, should be given to restoring domestic cotton production, which historically supplied the industry’s raw materials.

In a position paper made available to The Nation, yesterday, the CPPE boss, an economist, argued that while the objective of reviving the country’s textile industry is legitimate and commendable, an outright import prohibition is unlikely to achieve that objective.

Rather than revitalising the textile industry, he further argued, the proposed ban could impose substantial collateral costs on downstream industries, disrupt critical supply chains and jeopardise millions of jobs and livelihoods.

“The proposal reflects a narrow view of the textile industry’s challenges and overlooks the extensive linkages within Nigeria’s textile, garment, fashion, furniture and creative economy value chains. Effective industrial policy should address the underlying constraints to competitiveness rather than merely restrict imports,” Yusuf argued.

According to him, domestic textile manufacturers currently lack the capacity to meet the quantity, quality and diversity of fabrics required by Nigeria’s fashion, garment, interior design, and furniture industries. Even at the peak of the textile industry’s performance, he noted, local mills did not supply the full range of fabrics demanded by the market.

Therefore, he warned, an outright import ban would create supply shortages, increase production costs and weaken downstream industries that generate significantly more employment than textile manufacturing itself.

Further accentuating his position, the policy analyst reckons that a larger ecosystem will be put at risk should the Senate proposal scale through. According to him, the nation’s fashion, garment-making and tailoring industry, is conservatively valued at about ₦10 trillion, and presently provides livelihoods for an estimated 10 million Nigerians, making it one of the country’s most vibrant creative economy sectors.

“Textile fabrics are critical intermediate inputs for this ecosystem. Restricting imports would disrupt production, increase costs, reduce consumer choice and threaten thousands of micro, small and medium enterprises engaged in fashion, tailoring and garment manufacturing.

“The garment industry also generates substantial domestic value addition through design, tailoring, branding, embroidery, merchandising and retailing. In many cases, the local value added exceeds the value of the textile inputs. Public policy should therefore protect this broader value chain.

“Textile fabrics are equally important inputs for Nigeria’s rapidly growing furniture and interior design industry, where they are extensively used in upholstered furniture, office furniture, hotel furnishings and mattresses. The industry is valued at an estimated N7 trillion. A supply disruption would increase production costs and weaken the competitiveness of the sector,” Yusuf warned.

Noting that the real challenge for the industry is competitiveness, arising from the consequence of longstanding structural constraints rather than import competition. These, he listed to include high energy costs, expensive credit, poor infrastructure, logistics bottlenecks, obsolete technology, smuggling, weak access to long-term finance and policy inconsistency.

“Textile manufacturing is one of the most energy-intensive industries globally. Therefore, operating within a high-cost production environment has severely undermined the competitiveness of local manufacturers.

“It is noteworthy that imported textile fabrics already attract combined Import Duty and Import Adjustment Tax (IAT) of between 35 and 45 per cent. Yet these tariff protections have not restored the industry’s competitiveness because the core problem lies in production economics rather than import penetration.

“An import ban proposition addresses the symptom while leaving the underlying causes unresolved. Sustainable industry revival requires lower production costs, improved productivity and stronger enforcement of the existing tariff regime,” he said, adding that insecurity in farming communities, weak productivity, inadequate extension services and poor incentives have severely undermined cotton cultivation.

He further added that textile manufacturers also require access to affordable long-term finance, modern technology, reliable energy and a more competitive operating environment.

To reactivate the sector, Yusuf said that rather than an outright ban being mooted by the Senate, the federal government should adopt some policies that will stimulate the industry.

One of these is the adoption of a strategic government procurement policy which should require the military, paramilitary agencies, schools and other public institutions to prioritise locally produced textiles and garments for their uniforms. Besides, government, he said, should set up a textile competitiveness fund where it can channel part of textile-related import tax revenues into a dedicated fund providing single-digit financing for technology upgrading and industry modernisation.

Other policy consideration Yusuf urged the government to consider include reviving cotton production by supporting cotton farmers through improved seedlings, mechanisation, extension services, security and guaranteed off-take arrangements; strengthening border enforcement to combat smuggling aimed at improving the effectiveness of existing tariff protection and improving industrial competitiveness by reduce energy costs, improve infrastructure, lower financing costs and create a more conducive manufacturing environment.