WTO-CANCUN: Liberalisation Hurts Nigeria’s Textile Industry

By Toye Olori Reprint | | Print |

Toye Olori

LAGOS, Sep 4 2003 (IPS) - Cheap and sub-standard fabrics are flooding Nigeria, driving textile companies out of business, thanks to the WTO liberalisation policy.

The Textile, Garment and Tailoring Senior Staff Association of Nigeria and the National Union of Textile, Garment and Tailoring Workers – have singled out smuggling as a major cause for the collapse of the textile industry in Nigeria.

Ismaila Adeyemi, president of the Textile, Garment and Tailoring Senior Staff Association of Nigeria, says 60 companies have shut down in the last one year. And that 15 other textile firms are on the verge of collapse.

Employment in the textile industry has gone down to less than 57,000 from 140,000 since Nigeria’s entry into the World Trade Organisation (WTO) seven years ago, Ayedemi says.

The National Union of Textile, Garment and Tailoring Workers, meeting in the capital Abuja recently, said local industry’s market share had been eroded to 27 percent, with imported fabrics now taking over.

Nasiru Lawal, the president of the union, called for stricter security measures, including closure of borders with neighbouring countries to curb the flooding of the Nigerian market by banned imported textiles. He also called upon government not to succumb to pressures from textile traders to reverse the policy of designating only the two ports in Lagos for ‘legitimate’ textile imports.

The union also urged the government to take a second look at globalisation, saying: ”Nigeria cannot be more global than global forces which on the one hand call for lowering of tariff, market forces and free trade, but, on the other, protect their own market through increase subsidy, export support and direct restriction and ban on certain imports".

Commonwealth Secretary General, Don Mckinnon, who was in Nigeria this week to inspect facilities for the Commonwealth Heads of Government Meeting (CHOGM) in December has also criticised the West for insisting that poor nations should not subsidise agriculture.

He accused the European Union, the United States and Japan of not living up to their commitment to assist poor countries.

”Agricultural subsidies have a hugely distorting effect on the economy amounting to one billion U.S. dollars per day, or six times the current level of global aid. While the average EU company receives heavy funding in subsidies, 2.8 billion people live on less than two dollars per day,” Mckinnon said.

Rich nations spend 360 billion U.S. dollars on agricultural subsidies a year. Africa accounts for only 1.7 percent of global trade, even though it represents one-third of the membership of the World Trade Organisation, according to official statistics.

The Nigerian textile workers have suggested a number of solutions, including a return to single-digit interest rate and access to long-term loan facilities.

The Central Bank of Nigeria recently reduced banks’ interest rates to 19 percent from 22.5 percent in 2002. But economists argued that the 19 percent interest rate is still not enough to ensure the rapid growth of small and medium-scale industries in the West African country.

The workers also demand regular supply of fuel at official price, uninterrupted power supply, improved Naira exchange rate, availability of locally produced spare parts and investment in research as well as new technology and human capital.

As a result of erratic power supply, many industries rely on diesel to power their electric generators with the additional costs added to the prices of their goods. Fuel, too, has become expensive, as government increased the pump price of diesel from 26 U.S. cents per litre to 36 U.S. cents per litre. Even at that price, the product is hardly available at filling stations. Motorists buy them on the thriving parallel market.

There has also been mounting opposition to Nigeria’s membership of the WTO, prompting the government to appoint a representative to the WTO office in Geneva early this year. The government also has approved the posting of five officials to the Geneva office to ensure that Nigeria takes part actively in future negotiations.

”Nigeria has suffered a lot of setbacks during WTO negotiations because of the calibre of officers that represented it as most of them by regulation, were not allowed to go beyond certain level of talks,” said Mustapha Bello, former Minister of commerce.

The World Trade Organisation meets in Cancun, Mexico next week to find ways to bridge the gap between rich and poor nations.