Minister of State for Trade and Investment, Dr Samuel Ortom
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Federal Government on Monday decried the huge number of job losses in the textile industry, saying the number of workers employed in the sub-sector had fallen from 800,000 a few years ago to just 24,000.
The Minister of State for Trade and Investment, Dr. Samuel Ortom, disclosed this in Abuja at a stakeholders’ retreat for the textile sub-sector.
The retreat provided the platform for stakeholders to brainstorm and develop policies towards repositioning the sub-sector.
The retreat, with the theme, ‘Economic growth, wealth and job creation for Nigeria,’ was attended by the Minister of Trade and Investment, Mr. Olusegun Aganga, representatives of the ministers of Power, Mines and Steel, Agriculture, and Science and Technology, among others.
Painting a gloomy picture of the sector, Ortom said the Nigerian textile and garment industry, which had a fixed investment of $4bn (N640bn), used to be the second only after South Africa in sub-Saharan 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 the textile market in Nigeria. Within the same period, the sub-sector 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 sub-sector as a significant catalyst for economic growth.
Ortom said the Federal Government’s aspiration for the sector was to revive its job creation potential, thus contributing significantly to economic development.
He said, “Our aspiration for the sub-sector is to increase its share of the 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, Aganga, who chaired the event, said the strategy for the sector 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 sub-sector would be supported to expand their current operations.
This, according to him, will help to attract strong brands as well as enable operators to set up local manufacturing plants in the country.
Aganga blamed the deterioration in the sub-sector on weak linkages in the value chain, adding that the Industrial Revolution Plan for the textile sector would help address all the weak linkages.
He gave an example of how the IRP had helped to revive the cement sector, which he said, had helped the country to not only 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 will make this sector number one in Africa and number 10 globally.”
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 needed to 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 zero per cent interest rate, which should 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 interest rate of about six per cent.
Aremu said, “There is a 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.
“The tenor of the fund should also be elongated to about 20 years and the fund should be given to us at an interest rate of zero per cent.”