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Nigeria Spends $4 Billion On Textile Imports Yearly …Imports 47% Of LPG From US, Others

The Nigerian Textile Manufacturers Association (NTMA) has said the country spends $4 billion annually to import textiles and readymade cloths.

The Director-General of the Association, Mr Hamma Kwajaffa, said in Abuja that most of the imported textiles could be found at Kantin and Kwari in Kano and Balogun and Oshodi in Lagos.

According to Kwajaffa, “Influx of smuggled goods continues to flood major textile markets in Lagos and Kano states; textile importation do not only undermine the local Industry but steal our jobs. It deprives government of revenue; it is a drain on Nigeria’s precarious foreign exchange reserves,” he said.

He said that Nigeria had the potential to produce for the local market and to export to the ECOWAS market of 175 million people.

He said that Nigeria also have the potential to produce for the United States under AGOA and EU GSP scheme which Kenya, Ethiopia, Lesotho, Madagascar and a numbers of African countries are already exploiting.

Kwajaffa said that textiles used to be Nigeria’s foremost industry, being the second largest Employer after government and utilizing indigenous raw materials such as cotton.

However, he said that despite government’s intention to revive the sector, the reality on ground continues to be worrisome.

“The prevailing unprecedented harsh environment has dealt serious on the already fragile industry. Unless government takes urgent steps to address key issues raised by the industry, the ray of hope that had arisen from the recent government Initiatives may get extinguished.

“Other developing countries are helping their textile industry in many ways due to its high employment potential. Nigeria’s huge population of over 165 million people represents a large natural market for textiles.’’

According to him, India, which is the second largest textile producer in the world after China, recently announced 1 bn dollars incentive package for the textile and apparel industry to create 10 million jobs in three years.

“We commend the interest shown by the government in reviving the Nigerian textile industry in the past 6 months.’’

He said the industry has listed eight specific issues to the notice of government to intervene within the ambit of existing policy framework whereas some require new initiatives.

“ Re-scheduling of the CTG loan facility by the Bank of Industry to 10+2 years was agreed by the government and for this to be effective, a notification is still awaited.’’

He called on government to review the tariff on gas supplied to the industry in Naira to make it affordable.

He said that scarcity of black oil has crippled the operations of the textile mills in the North, adding that there is need to ensure availability of the oil to the textile mills through direct allocation from Kaduna and other refineries.

He also called for consistent supply of certified seeds to ensure adequate supply of cotton to local textile industry.

Under the dual exchange rate policy being currently pursued by the industry, the director general called on CBN to allocate forex at official rate for the industry to import of essential raw materials by the textile mills.

He charged the government to persuade its MDA’s to source all their uniforms from the local textile mills.

He also called on government to checking the influx of smuggled goods and action against counterfeit textiles which fake the Nigerian trade marks in an effective manner.

According to Mr. Jaiyeola Olarewaju, the former Director General of NTMA, said the benefits from a competitive textile industry in Nigeria are numerous.

Olarewaju said that greater demand for cotton would boost the income of Nigerian farmers.

“Government needs to walk the talk and fulfill the assurances given to the sector.’’

Meanwhile nearly half of the Liquefied Petroleum Gas, also known as cooking gas, consumed in Nigeria in the first three months of the year was imported from India and five other countries.

The country, which is home to the largest natural gas reserves in Africa and the ninth largest in the world, has continued to suffer supply shortage over the years.

Data from the National Bureau of Statistics showed that 47 per cent (146.14 million litres) of the LPG supply in the country in the first quarter of this year was imported while 53 per cent (164.71 million litres) was produced locally.

The United States accounted for 46 per cent (67.10 million litres) of Nigeria’s LPG imports in the period, while India, Trinidad and Tobago, Algeria, Argentina, and Equatorial Guinea supplied the remaining one per cent.

Nigeria imported 61.39 million litres of LPG in January, while 33.22 million litres were produced locally. The country imported 26.60 million litres and 58.15 million litres in February and March respectively while 55.72 million litres and 75.77 million litres were produced locally in February and March respectively.

It bought 12.95 million litres of LPG from India in January; 12.95 million litres from Algeria in January; 14.64 million litres from Argentina in February; 21.74 million litres and 4.69 million litres from Equatorial Guinea in January and February respectively; and 17.59 million litres from Trinidad and Tobago in March.

The US exported 19.29 million litres, 7.26 million litres and 40.55 million litres of LPG to Nigeria in January, February and March respectively.

According to the Nigerian National Petroleum Corporation, the country has around 202 trillion cubic feet of proven gas reserves plus about 600 trillion cubic feet unproven gas reserves.

“Out of 8.5bscfd of natural gas production in Nigeria, only 18 per cent of natural gas produced is being utilised by the domestic market. A large percentage of the gas produced is used for the export market. Re-injection is 32 per cent and flared gas stands at seven per cent,” the Group Executive Director/Chief Operating Officer, Gas and Power, NNPC, Mr Saidu Mohammed, said at an industry event last month.

Last month, the Nigerian Association of Liquefied Petroleum Gas Marketers commended the Federal Government for the removal of Value Added Tax on locally produced LPG.

The marketers and other industry stakeholders had over the years complained about the VAT being charged on locally sourced LPG, saying the tax made the cost of buying the locally produced LPG high, compared to imported cooking gas.

The President of the association, Mr Nosa Ogieva-Okunbor, said, “The clamour for VAT removal from domestically produced Liquefied Petroleum Gas has been of perennial concern to members of our association. The good news received by our association and the LPG industry is that the Federal Government has finally signed the approval of VAT removal on LPG and gazetted same which makes it an official pronouncement.”

He said the increased awareness of LPG usage had seen consumption in Nigeria grow from 50,000 metric tonnes in 2007 to over 600,000MT in 2018 with more indigenous investments in LPG bottling plants.

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