Economist advocates structural reforms to revive textile industry

Lagos: An economist, Dr Muda Yusuf, has called for comprehensive structural reforms to revive the ailing textile industry and reposition it for competitiveness and industrial growth.

Yusuf made the call in an interview with the News Agency of Nigeria (NAN) on Sunday in Lagos on the state of the textile sector and its implications for the broader manufacturing landscape.

He said the decline of the once-thriving industry reflected deeper structural challenges within Nigeria’s industrial ecosystem, including high production costs, weak competitiveness and policy inefficiencies.

According to him, the challenges confronting the textile sector are similar to those affecting other manufacturing segments such as tyres, batteries and electronics assembly.

Yusuf identified high energy costs as a major constraint, noting that textile production processes such as dyeing, printing and finishing are energy-intensive.

He said unreliable grid electricity had forced manufacturers to depend on diesel and gas-powered alternatives, significantly increasing production costs and eroding competitiveness.

“The consequence is that locally produced textiles have become unviable compared to imports,” he said.

The economist also highlighted the sector’s heavy dependence on imported inputs, including yarn and cotton, which exposes manufacturers to exchange rate volatility and rising input costs.

He added that market distortions caused by smuggling and the dominance of imported fabrics, estimated to account for nearly 90 per cent of market supply, had further weakened domestic production.

Yusuf noted that the influx of fairly used clothing continued to suppress demand for locally made textiles.

He also cited high interest rates, limited access to long-term financing and elevated logistics costs as key constraints on manufacturing operations.

According to him, previous intervention funds and tariff protections have failed to deliver sustainable results due to persistent structural bottlenecks.

To address the challenges, Yusuf called for reforms in the energy sector to ensure reliable and affordable electricity supply for industrial clusters, including the expansion of embedded and captive power solutions.

He also recommended the revitalisation of the cotton value chain through targeted interventions to boost local production and strengthen linkages between agriculture and industry.

The economist further urged government to strengthen border governance by intensifying surveillance and deploying technology-driven systems to curb smuggling, while aligning trade policies with domestic industrial objectives.

On financing, he advocated the creation of concessionary funding windows and improved access to long-term credit at single-digit interest rates for manufacturers.

Yusuf also emphasised the need to leverage public procurement to support the industry, including policies mandating the use of locally produced textiles for government uniforms.

He stressed that reviving the textile industry requires more than tariff protection or isolated interventions, calling for a coordinated and comprehensive reform agenda.

“The revival of Nigeria’s textile industry requires more than tariff protection or isolated interventions. It demands a comprehensive structural reform agenda addressing energy costs, input supply chains, financing constraints, and market distortions.

“Without tackling these foundational issues, industrial policy measures will continue to yield limited outcomes.

“However, with coordinated reforms and strategic policy alignment, the textile sector can be repositioned as a catalyst for industrialisation, employment generation, and economic diversification,” he said.