Benin Republic, the tiny nation of 15 million people, is the cynosure of the textile industry in the Economic Community of West African States (ECOWAS).
The rulers of Nigeria are eyeing their tiny western neighbour. The bone of contention is not the enormous strength of the CFA franc, the currency of Benin Republic. The CFA franc was trading at 24kobo to the naira in 2010. Today, it derides the naira as it trades at N42 to the CFA.
Ironically, no one in the federal government is worried about the strength of the CFA. The source of concern is Benin Republic’s booming textile industry.
The Glo-Djigbe Industrial Zone (GDIZ) sits on a sprawling 1,240 hectares of land. GDIZ handles cotton spinning, weaving, fabrics processing, and garment production.
The federal government wants to have a textile industry that is as effective as GDIZ. Two weeks ago, the government drove home its keen interest in having something like the DGIZ when it sent a delegation led by Vice-President Kashim Shettima to study the facility with a view to using the outcome of the visit to revive Nigeria’s textile industry.
The delegation to study the DGIZ was a very powerful one. It was made up of the governors of Imo, Plateau, Kwara, Zamfara, Katsina, and Jigawa states.
The Shettima delegation visited the GDIZ. The visit is designed to support the implementation of the federal government’s Special Agro-Processing Zone (SAPZ) programme.
It will provide practical lessons for re-building Nigeria’s textile sector which has suffered catastrophic decline as many factories were closed due to weak local processing and competition from cheap imported fabrics.
The high-level delegation from Nigeria engaged officials of Benin Republic, investors, and private sector operators in a bid to study industrial hub model for agricultural value addition, investment mobilisation, skill development, and export-oriented manufacturing in the process of identifying strategies for reviving Nigeria’s textile industry.
Besides, the delegation examined opportunities for technology transfer, industrial training, modern machinery, reliable energy systems, and public-private partnerships to improve competitiveness in Nigeria’s textile industry.
Up to the 1980s, Nigeria had a very effective textile industry. The industry was the second-largest employer of labour in the land. It employed 500,000 workers. Those were the days when Kaduna was known as Textile City as it hosted most of the textile factories in the country.
Besides Kaduna, Lagos and Kano had their shares of the nation’s textile firms. At the moment, the industry is a shadow of itself. The giant textile factory on Oba Akran Road, Ikeja is now occupied by a truck assembly plant.
The National Bureau of Statistics (NBS) rated the value of the textile industry in 2024 at a paltry N8.15 trillion. The industry generated N2.5 trillion in the first half of 2025. In its heydays, the contribution of the industry to the nation’s gross domestic products (GDP) would have doubled that figure.
Everyone knows why the booming textile industry suffered a catastrophic decline. The major problem was Nigeria’s endemic electric power outages. Power supply was so epileptic and the cost of alternative power was outrageous.
The textile firms could not source for alternative power and get their products to the market at competitive prices. The local market was consequently taken over by cheap fabrics from China and other Asian countries.
The Chinese and their counterparts in other Asian nations enjoyed very low cost of production because they had regular power supplies at give-away tariffs.
Consequently, they would pay the high cost of shipping their products 6,000 miles from Nigeria and still enter the Nigerian market at a cheaper rate than the ones produced locally.
Another factor that worked against local textile companies was the fact that the Chinese and their counterparts in Asia enjoyed the benefits of an integrated supply chain.
The dyes, chemicals, and synthetic fabrics used by Chinese textile companies are sourced locally. Ironically, their counterparts in Nigeria had to import those inputs with a depreciating local currency, the naira.
In fact, the situation is worse now. In the 1980s, the naira was trading at 75 kobo to the dollar. Today, it has depreciated to N1,375 to the dollar. That has worsened the plight of the textile manufacturers in Nigeria. The cost of production has escalated with the massive depreciation of the naira.
The federal government has always shown concern about the plight of the textile industry which once provided jobs to 500,000 people.
In 1997, the federal government introduced the Textile Development Fund Levy on textile imports. The essence of the levy was the protection of the domestic textile industry.
Proceeds from the levy were to be used to ameliorate the agony of Nigeria’s textile industry. Complaints from the textile industry suggest that the laudable objective of the levy is being defeated.
Textile industry watchers contend that proceeds of the levy are not getting to the textile firms that were supposed to benefit from it. The federal government must investigate the claim.
The irony of the powerful delegation led by the vice-president to study how to revive Nigeria’s textile industry is the fact that even the factors known by everyone to be the causes of the decline of the textile industry are not being addressed at the moment.
Nigeria’s epileptic power supply is at the root of the textile industry decline. Power supply is probably worse than when the textile factories were shut down.
At the moment, manufacturing firms the size of the defunct textile companies are placed on Band ‘A’ bill. No textile company can pay Band ‘A’ bill and get its product to the market to compete with products from China and other Asian nations.
There are fears that since the factors known to be the causes of the decline of the textile industry are still lingering, it would be extremely difficult to implement whatever is recommended by the Shettima delegation.
The federal government should first of all tackle the power problem before thinking of implementing whatever the Shettima delegation will bring from Cotonou.