Textile imports into Nigeria have reached a 15-year high, doubling in just two years, despite efforts by the federal government to revive local production. Data from the National Bureau of Statistics (NBS) reveals that the textile, apparels, and footwear subsector has not recorded positive growth since 2018. The federal government, through the Central Bank of Nigeria (CBN), has implemented various intervention programs, including financial support, training, and foreignl exchange restrictions, to promote local production of textiles. However, NBS data shows that textile and textile article imports rose by 100.3 percent to N365.5 billion in 2022, the highest in at least 15 years, compared to N220.5 billion in 2019.
Hamma Kwajaffa, the director-general of the Nigerian Textile Manufacturers Association, expressed disappointment with the CBN’s efforts, stating that despite freezing the accounts of importers to encourage foreign investment in local production, the high cost of production in Nigeria makes it uncompetitive. He also pointed out that out of the country’s 24 textile industries, only three are functioning properly due to patronage by some ministries, otherwise, they would have closed down long ago.
The textile industry has historically been one of the top contributors to Nigeria’s manufacturing sector, with the potential to create employment opportunities, generate export earnings, attract foreign direct investment, and reduce poverty. However, in the 1990s, many textile mills in Nigeria closed down due to challenges such as smuggling, importation, inadequate power supply, inconsistent government policies, and insecurity. To revive the industry, Nigeria banned the importation of textiles and other fabrics in 2008, but lifted the ban in 2015 and imposed a 35 percent import duty on textiles. In 2019, the CBN further imposed foreign exchange restrictions on textile imports.
Despite these protectionist policies, the Nigerian textile industry has struggled to compete with imports due to challenges such as high production costs, lack of competitive pricing for raw materials, and a depreciating currency. Many textile companies have closed down despite government intervention efforts, and the market for foreign textiles in Nigeria still dominates with 80-90 percent imports. Experts suggest that in order to improve local production and competitiveness in the textile industry, the government should address challenges related to raw materials and the cost of power in a significant and sustained manner.