The Centre for the Promotion of Private Enterprise (CPPE), a frontline organized private sector advocacy group in Nigeria, has warned the Senate on its move to ban textile importation in view of the potential risks to the nation’s growing fashion industry and the attendant implications for loss of millions of jobs in the industry.
The CPPE’s Chief Executive Officer, Dr. Muda Yusuf, in a Policy Brief issued on Sunday noted that though the goal of reviving the nation’s textile industry through legislative initiative remained commendable, a complete ban on imports could have significant ripple effects across multiple sectors of the economy.
The renowned economist maintained that restricting textile imports would disrupt supply chains, raise production costs and weaken downstream industries such as garment manufacturing, tailoring, fashion design, furniture production and interior decoration, all of which depended heavily on imported fabrics as production inputs.
According to the group, Nigeria’s fashion, garment-making and tailoring industry, which is valued at an estimated N10 trillion and creates about 10 million jobs, remains one of the country’s most vibrant creative economy sectors.
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In addition, the Centre discloses that 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,” Yusuf said.
In view of the immeasurable value of the industry to the economy, the OPS advocacy group warned that the proposed import ban could adversely affect the country’s furniture and interior design industry, estimated to be worth about N7 trillion, as textile materials are widely used in upholstered furniture, office furniture, hotel furnishings and mattresses.
It argued that rather than import competition, the decline of Nigeria’s textile industry derived largely from structural challenges, including high energy costs, expensive financing, poor infrastructure, logistics bottlenecks, obsolete production technology, smuggling, weak access to long-term capital and inconsistent government policies
The Centre pointed out that imported textile fabrics were already attracting combined Import Duty and Import Adjustment Tax of between 35 and 45 per cent, noting that even then these protections have failed to restore the competitiveness of local manufacturers because the industry’s core challenge lies in its production environment.
It maintained that currently the domestic textile manufacturers currently lacked the capacity to meet the quantity, quality and variety of fabrics required by the fashion, garment, furniture and interior design industries.
The CPPE clarified: “As a result, an outright import ban would create supply shortages, increase production costs and undermine downstream industries that generate significantly more employment than textile manufacturing itself.”
It recommended that to revive the textile industry sustainably, there was the need for the government to introduce a comprehensive value-chain strategy centred on restoring cotton production, improving access to affordable long-term finance, modernising production technology and reducing the cost of doing business.
Similarly, it advised the government to prioritise locally produced textiles and garments for uniforms used by military, paramilitary agencies, schools and other public institutions; establish a Textile Competitiveness Fund financed from textile import tax revenues; strengthen the border enforcement to tackle smuggling; support cotton farmers with improved seedlings and mechanization; and implement reforms aimed at lowering energy and financing costs for manufacturers.
The CPPE maintained that to optimize its value addition to the economy, the textile industry required structural reforms to improve productivity and competitiveness rather than additional import restrictions, warning that a blanket import ban on textiles could encourage smuggling, and reduce customs revenue and lead to loss of jobs, among other negative effects on the economy.
