Textile Industry in Nigeria – Textile & Leather Market Snapshot
Textile Industry in Nigeria: Nigeria’s textile manufacturing market was one of the largest markets in the African region. The Textile Industry in Nigeria is now growing due to new supporting government policy and the fast growing middle class community with higher disposable income and general huge consumer base that are embracing locally manufactured Nigerian fabrics.
In 2015, Nigeria launched a policy framework to stimulate the textile industry known as the ‘National Cotton, Textile and Garment Enterprise Policy’. This policy is a part of the Nigerian Industrial Revolution Plan (NIRP) and seeks to create an environment to encourage textile production in the country. The objective is to provide the textile industry with the world class facilities needed to set-up competitive textile units.
Raw materials are available from cotton fields which can grow in 26 out of 36 states of the country and cotton farmers are being encouraged by the Federal Government to increase their output. In the first quarter of 2015, Nigerian textile, apparel and footwear segment produced goods worth $2.31 billion, accounting for 21.7 per cent of the country’s manufacturing output.
Integrated Textiles and Garments Parks (ITGPs) will be developed nearby to raw materials, markets, availability of infrastructure and geographical advantages.
The parks shall either be fully private sector initiative or operate on a Public Private Partnership basis. Each ITGP is expected to host between 30 – 40 textile and
Other incentives to stimulate production include:
- Removal of tax on imported equipment and inputs: All investors who invest in the textile sector from 2015-2019 will be able to import inputs such as plant
and machinery, spares, dyes, chemical and packaging materials duty and VAT free for a period of 2 years.
- All investors in the sector from 2015-2019 will be able to import imputes used in Textile manufacturing materials and technology shall be duty and VAT
free for a 4 years period and to service the industry, all major textile manufacturers in Nigeria should benefit from a 3 year tax holiday (2015-2017).
- All military and paramilitary agencies as well as government schools are to compulsorily purchase only made-in-Nigeria textiles and garments for their
uniforms once the necessary standards are met.
- Nigerian Government is targeting an injection of $1.85bn in the sector between 2016 – 2019.
Textile Industry in Nigeria – Market Fundamentals
Nigeria is the next global manufacturing hub
- $150bn consumer market.
- ECOWAS $734.8bn GDP.
- Manufacturing Sector increased year-on-year by 20%.
- Government Policy; Nigerian Industrial Revolution Plan (NIRP) aims to add a further $25bn to annual manufacturing revenues in the next 3 years.
- Government agencies, such as Bank of Industry (BOI), are providing funding and low interest rate, long term loans for manufacturers to re-tool and
- The manufacturing sector is now the major driver of economic growth in Nigeria with the consumer market estimated at $150bn.
- Nigeria GDP $500bn+ p/a and 170 million population
- Compelling growth story, demographic dividend, political stability, improving market transparency & good economic governance.
The Economic Community of West African States (ECOWAS), such as Ghana, Ivory Coast and Cameroon has 300 million consumers, with combined GDP of
$734.8bn and annual growth rate of 6.3%.