Wednesday, December 02, 2015 8:51 AM / FBNQuest Research Related News
Today we turn our attention to Nigeria’s textile, apparel and footwear industry, the second largest contributor to the manufacturing sector. The sub-sector accounted for 21% of manufacturing GDP in Q3 2015. However, it contracted by -1.3% y/y.
This is understandable considering the economy as a whole is strained due to the current macro headwinds. Industry sources suggest that there are over 30 operational textile mills while 80 are moribund.
As for the footwear industry, production in Aba, located in south-east Nigeria, has received global recognition. Investors from Brazil have indicated interest in collaborating with the state government to provide modern machineries aimed at boosting shoe production.
The Nigerian Investment Promotion Commission (NIPC) recently announced it would work closely with National Cotton, Textile and Garment (CTG) policy committee to resuscitate the country’s textiles industry.
Based on data from a collaborative survey conducted by the National Bureau of Statistics, CBN and the Federal Ministry of Agriculture & Rural Development, annual cotton production was estimated at 533 metric tonnes (mt), with Zamfara and Katsina accounting for 25% and 22% of total production respectively.
ccording to a report released by the National Union of Textile, Garment and Tailoring Workers of Nigeria (NUTGTWN), the textile industry performed poorly in H1 2014. This was mainly due to heavy inflow of smuggled textiles, which usually accounts for over 75% of Nigeria’s textile market.
The CBN has indicated interest in lending support to this industry through the establishment of an intervention fund at a single digit interest rate.
The new administration favours the revival of the country’s textile and footwear industry as it would play a major role in diversifying the economy. Not only could it result in revenue diversification and reduce pressure on the import bill, it could also help boost employment