Focus: Made in Nigeria

A Stitch in Time

May. 12, 2019

Looking to diversify its economy and become less dependent on oil, Nigeria sees hope in the rebirth of textiles, but faces stiff competition.

Textile manufacturing was one of the first development booms in Nigeria after independence. For it to happen again, Nigeria needs to demonstrate to investors a level of political stability that can rival competing countries.
Nigeria's domestic manufacturing economy, especially textiles and leather goods, has had a rocky road in recent years. Perceptions among Nigerians tend to see local goods as being of lower quality than foreign products, a roadblock to creating a thriving domestic manufacturing sector. Expanding the sector is, however, key to sustainable development and moving beyond oil as a central engine of economic growth in Nigeria. Oil consumption could drop and prices plummet; however, people will need clothes and shoes regardless.

The story of Nigeria's manufacturing sector is similar to that of other emerging economies. After joining the World Trade Organization, the liberalization of markets meant that consumers had a chance to buy foreign goods made in China and elsewhere. Although Nigeria has a history of textile manufacturing and domestic cotton production, these sectors have also been hit by the smuggling of finished textiles into Nigeria from neighboring countries. Unreliable infrastructure, particularly in electricity generation, undermines the whole industry.

The “Made in Nigeria" label is about more than revitalizing a past version of the Nigerian economy. Rather, it provides the building blocks for a more resilient society. In light of this, Nigeria's government has implemented projects to increase the access to electricity. The African Development Bank has praised Abuja's effort to bolster infrastructure as crucial to economic development, but the outcome of these efforts remains uncertain.

Rates of unemployment approaching 40% among young Nigerians suggest a rocky road ahead, with millions of restive and disenchanted young Nigerians finding it difficult to make ends meet. Similar circumstances in growth economies not only limit domestic purchasing power but make it harder for local industries to get off the ground.
There is evidence this trend could be changing, thanks to a potential USD200-million investment by a Dutch company in the Nigerian textiles industry. In November 2018, President Muhammadu Buhari had welcomed the move by Vlisco group.
“I am extremely excited by the prospects of reviving the industry because it will keep farmers busy, create employment which brings more security, help the economy, and result in the transfer of technology. We have a large market to absorb the products," Buhari said, according the Vanguard Nigeria, adding a revived textile industry would be “like going back to the good old days."

“I am convinced it is time for the textile industry to move from Asia to Africa," Buhari added, hailing the ability for Nigeria to produce both clothing and the raw material it needs in the same country.

Beyond trade agreements, Nigeria's biggest obstacle in competing with Asian hubs of textile manufacturing is the political instability that follows Nigeria across shocks to oil prices. Textile manufacturers and investors in the sector in China and Southeast Asian countries do not have to worry about a fraught or contested vote. Beyond electricity, unemployment or smuggling, the biggest roadblock to a revival of Nigeria's textile industry, and the resulting benefits to the development of civil society, appears to be the uncertainty that surrounds Nigerian leadership. A succession crisis will not make the lives of Nigerians any better nor the prospects of a renaissance in textiles any more likely.