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Financial crunch disables Nigerian textile sector to show competitiveness

YarnsandFibers News Bureau 2015-06-23 10:00:00 – Nigeria

The Nigerian textile sector is facing a huge financial crunch as it is unable to prove its competitiveness. Although several factories have benefited from a $500m government intervention to revive the country's textile industry, according to manufacturers monetary support alone will not fix the problem.

Saidu Dattijo Adahama of Adahama Textiles said that they not only need the financing but also the electricity supply which is still below 20 percent.

Secondly, the business environment is not really sufficient enough for "made in Nigeria" products to compete with the Chinese imports. The Nigerian textile sector cannot compete with the Chinese without protection.

Since manufacturers cannot produce enough material, this means that textile traders down the line must rely on imports, much of which is smuggled.

At the same time, importers have tightened the supply chain, insisting on upfront payment since the local currency, the naira, was devalued.

Traders, on the other hand, want a quick propping up of the local currency to make imports affordable. Until such interventions happen, more traders and manufacturers will be at the mercy of Asian suppliers.

Cheap imported fabrics, power cuts and a rise in production costs are making it difficult to for Nigerian textile traders in the country's northern city of Kano to compete.

Nura Maliya, local textile trader, said that many traders have closed shop as supply lines are drying up as distributors insist traders pay upfront before they deliver. He, too, is about to follow if things don't improve soon.

In the face of stiff Asian competition, the manufacturers are asking for government protection as they can only rely on the government to lend them a helping hand in this crisis.

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