For too long, Nigeria’s Clothing [Design] and Textile industry has remained a stricken giant locally and globally. It is time to fix the giant.
Within the past five years, when it comes to fashion, Nigeria has, arguably, experienced tremendous growth. For example, recently at the prestigious platform of New York Fashion Week for Fall 2009, Nigerian fashion brands MOMO and Tiffany Amber showcased their collections to the world’s media, buyers and fashion elite. Further, Nigerian designers have and continue to showcase their designs at reputable fashion weeks across the continent.
However, a closer scrutiny begs the question as to the “industry’s” growth and even further emphasizes the saying that “all that glitters is not gold.” As it stands, Nigeria’s Textile Industry has suffered a heart attack while its Clothing/Design industry hemorrhages away. There is a real urgency, the urgency of now, that requires stakeholders and government officials to take action and place the industry on the global fashion map, where it belongs. To do so, however, means Nigeria must halt in its tracks in its pursuit of the global spotlight and instead focus on meeting its basic local requirements.
A Clothing and Textile Industry in Crisis
On a basic level, Nigeria’s Textile and Clothing supply chain works in five straight forward methods. First, producers [agricultural] of raw materials, in this case cotton, grow cotton. Next, they gin the cotton. Third, they sell the cotton to the fabric designers. At this stage is where fabric production occurs as the designers spin yarns, weave, knit, dye, print and finish fabrics. In the Western fashion supply chain, at this stage, auxiliary services such as advertising and promotion are undertaken to actively promote the designed fabrics. Nigeria’s fabric designers have no such thing. After fabric design/production, comes the fourth step which is fashion design/production. Here, Nigerian fashion designers purchase the designed fabrics which they then cut, trim and make into designs.
In the Western fashion industry, designs are subdivided into “high fashion,” “mass fashions” etc. Further, at the fashion production stage, fashion auxiliary services are also engaged i.e. marketers and merchandisers come into play to market or create buzz about the designs. For now, most of Nigeria’s “design industry” skips these auxiliary services. They also skip classification of clothes as “ready to wear” or “high fashion” as most of the “design industry” is not there yet.
The fifth and final step in the supply chain is exporting and retailing of completed goods. In the West, once designs are produced, they are showcased in showrooms in major markets allowing fashion buyers the opportunity to check and purchase for their retail stores: department, chain, specialty or discount. In contrast, in Nigeria, 99% of fashion designers retail directly to their clientele. There are no retail giants, specialty, chain or discount stores. In the past five years, there has been an emergence of design boutiques. For the most part, however, these boutiques are designer owned. For instance, MOMO, Deola Sagoe and Tiffany Amber own their own boutiques. For boutiques that might be synonymous with Western ones i.e. non-designer owned, they stock primarily foreign designs from Europe, Italy being a favorite. Further, for the Nigerian designer, retailing to market women in Oshodi, for example, is not an option as the designs are simply unaffordable by the average Nigerian woman.
At every step of the already described supply chain, there is a fundamental ongoing crisis with the first and second steps [producers of raw materials and fabric designers] suffering the aforementioned heart attack. Indeed as of late 2008, every major headline across the nation’s newspapers showed a textile industry pleading for a 70 million Naira bailout to avoid a complete collapse.
What went wrong? While Chinese imports are primarily blamed for the current state of the industry, history shows there are numerous significant factors independent of the Chinese that contributed to the current crisis ridden/collapsed industry.
Factors Contributing to Nigeria’s Crisis Ridden Clothing and Textile Industry
Trade Policies: Prior to the mid-50s, Nigeria had a successful agricultural industry, exporting cash crops like cotton, cocoa and groundnut. The success of the agricultural industry paralleled with that of textiles. Textiles and agriculture went hand in hand as agriculture provided the raw materials i.e. cotton in the first step of the textile supply chain. By the mid-50s, however, the agricultural boom came to an end. Post 1960, attaining its independence and embracing nationalism, Nigeria adopted an import substitution strategy. This translated to control on cotton prices and high tariffs, among many tactics used, on imported textiles. From 1967-70 [the Biafra War] and later 1977, there was an outright ban on imported textiles. These bans were meant to provide leverage for Nigeria in its dealings with its trading partners. In fact, the 1977 ban, for example, was the result of what the government deemed a self-sufficient Clothing and Textile industry.
The government, arguably, got it right. As of 1980, Nigeria was ranked the third largest textile industry in Africa after Egypt and South Africa. However, amidst the oil boom of the 70s to 80s, Nigeria became over reliant on oil, to the detriment of its agricultural sector. Cotton production, for example, was in the 1980s, fifty percent below its production capacity. There was nothing in place to actively stop its rapid decline. Nigeria engaged in a culture of high consumption but produced less. By 1974, Nigeria was importing simple basics like food. Things would only worsen.
In 1985, President Ibrahim Babaginda took office. A year later, he steered Nigeria into an adoption of the World Bank and International Monetary Fund’s [IMF] Structural Adjustment Program [SAP]. SAP ran from 1986 to 1988 and was defined as a period of massive devaluation of the Naira.
Raw Materials: From 1903 to 1974, the British Cotton Growers Association was in place to help regulate and advocate for Cotton Growers. By 1974, it was replaced with the Nigerian Cotton Marketing Board who retained the same functionalities including added functions of marketing its cotton. By 1986, however, the year SAP was implemented, the board was abolished. What would follow, especially with no oversight, was a further deterioration within the cotton industry in terms of production capacity. This meant the textile industry had insufficient and at times no raw materials to work with. As a result, fabric manufacturers relied heavily on imported raw materials and other textile inputs to even begin fabric production.
Outdated Equipments: The massive devaluation of the Naira, however, made it impossible for manufacturers to even afford imported textile and textile inputs. Further, even fabric designers that could afford raw materials had to contend with outdated and run down equipments. The use of outdated equipments was, needless to say, crippling as it forced fabric designers to operate well below capacity. For instance, in 1986, the industry was performing at 37% below capacity utilization. By 1998, it had diminished to 28%.
Infrastructural issues and Unemployment: Exacerbating the problems above were infrastructural issues, particularly power supply. The constant power failure, also caused by a Nigeria Electric Power Authority [NEPA] operating well below its 6,000 MW capacity, made it extremely difficult for textile businesses to see a return on investments much less break even. The corresponding result was heavy retrenchments, huge turnover rates with the adverse effect of erosion of skilled workers, factory closures, riots and chaos.
Further, although Nigeria, especially during the import substitution era of the 70s had tried to make most of its textile plants Nigerian owned, the fact remained that foreigners had the major market share. In 1986, for instance, according to extensive research conducted by Swedish researchers on the union power in Nigeria’s textile industry, Nigeria’s Textile Manufacturer Association reported 75 members. Of these 75, 30 were Indian owned firms with the rest being Chinese and Lebanese. Only 4 of the 75 were reported as indigenous Nigerian owned firms. Amidst all the instability, huge operational cost, riots and corruption, these foreigners returned to their countries of origin. Sometimes, they left just as quickly as they had appeared leaving no retrenchment benefits.
Corruption: Adding fuel to the already burning fire of the textile industry was the government’s corruption practices. Despite the billions made from oil revenues, the Nigerian government had nothing to show. Oil monies had been used to sustain Nigeria’s addiction on imported products, engage in excesses and embezzlements. For instance, in the 80s, the government built a $2.4 billion smelter. The cost was 60-100% higher than what it would have cost to build the smelter in a developed country. In addition, in the mid 90s, the show of outright defiance to the rule of law was exemplified by President Sani-Abacha who blatantly looted funds from the treasury in what was dubbed the “Petroleum Trust Fund Scam.”
“Bend Down Select” and Chinese Imports: The above factors along with trade liberalization polices adopted in the 90s, opened the floodgates for Second Hand Clothing aka “bend down select” from the West and later Chinese goods. Specific to the “bend down select” market, affordability reigned supreme as Nigeria could no longer afford to cloth its own citizens. Specific to Chinese imports, neither Nigeria nor the world anticipated the threat China would pose for textile companies in the West and developing countries.
Prior to 1974, the USA along with other European countries who made up members of GATT, had signed trade agreements that restricted trade in cotton production with its exporting countries. Further restrictions came in 1974 with the establishment of the Multi Fiber Arrangement [MFA], a system of quotas which restricted all importation of textile goods from developing countries, with the exception of silk. MFA was set to expire in December of 2004. What appeared unanticipated was that China would join the World Trade Organization [WTO]. China joined the WTO in 2001 and by 2003, it had 17% of the world’s textile market share. Meanwhile, in 1995, the WTO enacted the Agreement on Textiles and Clothing [ATC]. The purpose of the ATC, a multilateral instrument, was to eliminate textile quotas for all WTO members by January 1st, 2005. By 2006, China was the largest producer of apparel/textile products in the world.
With China’s strong emergence on the apparel/textiles world map, it flooded other countries’ domestic markets, across the globe, with its cheap imports. Meanwhile, African countries like Nigeria who finally saw restrictions on trade lifted and were waiting to take a big bite out of the Western apple, where now having to contend with China.
Nigeria matched against China was simply not a threat. For Nigeria’s textile industry, the lack of diversity and innovation in textile designs plus the aforementioned factors, made it extremely vulnerable. Chinese textile mills outpaced Nigeria in production capacity, labor/skilled workers, regulatory compliance in exporting to Western countries and innovative equipments. Worse, the Chinese did not spare Nigeria in its domestic market. The Chinese mastered and produced Nigerian designs like “ankara” and “”aso oke,” stamped “Made in Nigeria” on them and sold them in Nigeria as local products.
The affordability saw consumers shunning the more expensive and genuine Nigerian textiles for China’s cheap imports. Nigeria’s already stressed out textile industry saw even more factory closures, retrenchments, and lesser production capacity.
While the government attempted to put a bandage on the wound inflicted by the Chinese, the mind set of Nigerians and corruption practices made it very hard to enforce. As such, there has been ongoing and overwhelming smuggling of Chinese goods into the country undermining government efforts.Against this backdrop is where the Nigerian Fashion Design “Industry” and designer comes in.
The Nigerian Fashion Design “Industry”With “extravaganza” fashion events too numerous count, it is easy to believe there is a Nigerian Fashion Industry. However, the evidence contradicts such assertion. Simply put, Nigeria has no design industry. The factors that substantiate this conclusion follow:
First, fashion is treated more as a cultural experience. For decades, the Nigerian society has frowned on fashion design as a “serious career.” Indeed norms and attitudes reveal a degrading “you can’t be serious” attitude towards fashion. Across the nation, fashion is one “ko mo le” event after another as monies are spent on shows and parties at overpriced venues with the sole purpose of displaying an unmatched level of ostentatiousness. However, show me a successful developed or developing country and I will show you a corresponding successful garment industry where it is very much about the business of fashion as it is “extravaganza.”
Second, there is no functional regulatory body that governs designers. In the West and South Africa, stakeholders in any professional industry form regulatory bodies whose primary responsibilities include: providing resources for members, engaging in public policy and governmental relations with law makers, and establishing acceptable industry practices to stay competitive both locally and abroad.
The Fashion Designers Association of Nigeria [FADAN], established eight years ago, appears to be a regulatory body for Nigeria’s “design industry.” While FADAN might have initially been conceived to perform the above basic duties, it simply has not. There has been no meaningful crafting and influencing of public policy with respect to the designers it purports to serve. Further, FADAN lacks any structural systems that meaningful address and respond to the needs of its constituents. Neither does it address the issue of sourcing for its members. As a result, most designers, especially the established ones, have lost faith in the organization.
Third, there is an astonishingly huge fragmentation among designers. It is hard to work towards a common goal when there is major divisiveness within any group. The sheer fragmentation and lack of cohesiveness among Nigerian designers is simply astonishing. Nigerian designers with their creativity can stand in the gap for the crisis ridden textile industries as they work together to identify sourcing opportunities; and work with fabric designers to create innovative and complementary fabrics for their businesses. This, however, is simply not the case. Instead, there are redundant and duplicative efforts rather than camaraderie.
Fourth, there remains a lack of highly skilled workers in the industry. One of the biggest complaints from Nigerian designers is the lack of skilled workers and workers who can meet production deadlines. As such, many Nigerian designers look and do outsource their work to, yes, the Chinese.
Fifth, there is a lack of protection of intellectual property rights. Protecting the intellectual property rights, copyright/trademarks, of the Nigerian designer is important. However, that appears a lost cause and Nigerian designers are frequently subjected to trademark infringement and counterfeits of their goods both from the Chinese and at times their local competitors.
Sixth, there are no auxiliary/merchandising services that can amplify the Nigerian designer brand. Holland’s Vlisco recently launched an aggressive campaign in Nigeria marketing and branding Vlisco fabrics through its fashion designs to Nigeria’s designers. While Nigeria’s designers embrace Holland’s Vlisco, they must also engage auxiliary services to brand their products, services and names independent of promoting multinational European brands.
Seventh, designers lack access to finance. For both the clothing [design] and textile industry, access to credit remains a major challenge. It is probably why there is no “design industry,” per se. The fashion business is capital intensive and access to credit is paramount to its success. Nigeria’s fashion designers, like other industries, are categorically denied access. The few designers who have been able to make it are members of Nigeria’s elite. The lack of access to credit is simply unacceptable as it leaves out extremely talented pool of designers.
The following are suggested solutions for both the textile and clothing manufacturing industries. I understand Nigeria will not solve its infrastructural problems [particularly power supply] overnight. However, while it hopefully begins working towards repairing infrastructural issues and implementing favorable trade polices, there are steps all stakeholders can take to begin fixing and awakening the stricken and crisis ridden giant that is Nigeria’s Clothing and Textiles Industry. These suggestions serve as an illustrative list:
Textile manufacturers and agricultural producers should collaborate to advocate for stronger infrastructure and government incentives that can help increase production of raw materials such as cotton.
The clothing and textile industry should form a governmental relations arm within their respective sectors that undertake a comprehensive study and solutions on how to modernize, strengthen and get the industry to perform competitively locally and ultimately globally.
The government should rethink and come up with stronger safeguard measures against Chinese and SHC imports. There is still a high rate of smuggling of products driven by affordability despite the ban on Chinese imports, for example. Thee one size fits all ban that worked in the 60s and 70s is no longer the solution for today. The government should undertake several measures and provide incentives to the average Nigerian that serves as deterrence for buying smuggled goods.
All stakeholders should make a commitment to train and demand innovation in all phases of the supply chain. In addition, with respect to innovation, special emphasis should be added to natural/green textile goods that can be exported to the West as countries like the USA embark on a green economy.
Stakeholders particularly in the design world should consider creating a sourcing data base through appropriate agencies and organizations to better serve the needs of their respective constituents. In addition, these agencies as well as the government should teach entrepreneur skills.
All stakeholders and government should engage in ongoing dialogue which identifies the needs and solutions of the industry.
Government should provide financial incentives that encourage financial institutions to provide the much needed access to credit for things like new machineries.
Government should build fashion clusters in historically textile driven states like Lagos, Kano, Kaduna, Abuja and the now emerging Calabar to encourage more interaction and collaborations with designers and textile manufactures.
The government should develop and brand Nigerian cotton and other textiles much the same way as Holland’s Vlisco or any other multinational does in Nigeria.
All stakeholders as part Establish or revamp an active fashion council/regulatory body that meets the needs of designers.
Finally, all stakeholders must create awareness through training and appropriate liaisons with the US Trade Office on how Nigeria’s clothing and textile industry can take advantage of important trade agreements like the Africa Growth and Opportunity Act which permits duty free imports of goods made in Africa to the USA.
~Article by Uduak Oduok, Esq.