Textile Revival Needs Structural Reforms, Not Bailouts – Manufacturers

The Manufacturers Association of Nigeria (MAN) has urged the federal government to abandon short-term bailout measures and instead implement far-reaching structural reforms to revive the country’s struggling textile industry, saying such reforms could transform the sector into a major source of jobs and foreign exchange earnings.

The association argued that despite over a decade of intervention funds, including the Central Bank of Nigeria’s Cotton, Textile and Garment (CTG) Policy and the N100 billion Real Sector Support Facility, the textile industry has continued to operate below capacity because the fundamental challenges facing manufacturers remain unresolved.

Director-General of MAN, Mr. Segun Ajayi-Kadir, said the industry’s revival depends on addressing structural bottlenecks such as inadequate power supply, poor cotton production, smuggling, obsolete machinery and limited access to long-term financing rather than providing periodic financial interventions.

According to him, while intervention funds may offer temporary relief by helping manufacturers settle debts or meet energy costs, they do not solve the underlying issues affecting competitiveness.

“Key challenges that need attention include the high costs and inadequacies of energy supply, rampant smuggling and counterfeiting, a lack of quality raw cotton, outdated machinery and inefficient loan structures. While aid funds may help with immediate needs like fuel and debt repayments, they do not resolve the core issues of energy supply, cotton availability or market access,” he said.

Ajayi-Kadir called for comprehensive reforms aimed at reducing production costs and strengthening the entire textile value chain.

He proposed the establishment of gas-powered Independent Power Plants (IPPs) in major textile clusters such as Kano, Kaduna, Aba and Ogun, alongside industrial parks equipped with shared Effluent Treatment Plants (ETPs), steam utilities and machinery workshops to reduce operating costs.

He also advocated the deployment of high-yield, pest-resistant cotton seeds and contract farming arrangements between textile mills and local farmers to guarantee a steady supply of raw materials while reducing dependence on imported cotton and exposure to foreign exchange volatility.

The MAN chief further recommended restructuring industry financing by extending loan tenures to between 10 and 15 years and allowing duty-free importation of modern spinning, weaving and printing machinery to improve productivity and competitiveness.

To curb smuggling and counterfeiting, he urged government to deploy digital cargo tracking systems, install scanners at border posts and strictly enforce Executive Order 003 on local procurement of government uniforms.

Ajayi-Kadir also stressed the need to revive technical institutions to produce skilled textile engineers, weavers and computer-aided design (CAD) specialists capable of supporting a modern textile industry.

He noted that compliance with global quality and environmental standards would position Nigerian manufacturers to maximise opportunities under the African Continental Free Trade Area (AfCFTA) and the African Growth and Opportunity Act (AGOA).

Drawing lessons from global success stories, Ajayi-Kadir cited Bangladesh, Vietnam and India as countries that revitalised their textile industries through structural reforms rather than financial bailouts.

He explained that Bangladesh became the world’s second-largest garment exporter by providing duty-free access to production inputs and establishing special economic zones, while Vietnam leveraged stable electricity, foreign direct investment and free trade agreements to build a technology-driven textile industry. India, he added, strengthened its sector through PM MITRA parks, Production-Linked Incentive (PLI) schemes and significant investments in improved cotton production.

According to him, Nigeria should focus on building a sustainable textile ecosystem rather than merely keeping struggling factories afloat.

“With stable energy, reliable local cotton supply and protected markets, Nigeria’s textile industry has the potential to create millions of jobs and generate substantial foreign exchange earnings, just as Bangladesh and Vietnam have done,” he said.