By Victor Ahiuma-Young
Organised Labour has raised alarm that Nigeria is losing over N75 billion annually to smuggling of textile materials into the country.
National Union of Textile, Garment and Tailoring Workers of Nigeria, NUTGTWN, in a communiqué at the end of a three-day workshop in Ilorin, Kwara State, for organisers and self-employed Tailors and Small Scale Garment makers, organised in collaboration with Friedrich Ebert Stiftung, FES, said the cost of manufacturing textiles in Nigeria was too high, allowing room for cheap foreign goods to be imported.
Participants also came from co-affiliates of IndustriALL Global Union in Nigeria, namely Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and Chemical and Non-Metallic Products Senior Staff Association of Nigeria (CANMPSSA).
The communiqué by President and General Secretary of the union, Oladele Hunsu and Issa Aremu, respectively, commended the Federal Government for the intervention fund for the textile industry, but noted that financing was just one of the numerous challenges facing the textile industry in particular and manufacturing industries in general.
According to ithe communique, “key problems are infrastructural inadequacy, raw materials, electricity supply, smuggling, counterfeiting and faking among others which need to be urgently addressed by the government.
The performance of the Nigerian textile industry remained at low ebb in the first half of 2014 due to lack of an enabling environment and inconsistency in government policy.
There are 25 textile mills employing about 24,000 workers. Capacity utilisation in the industry remains below 50% and growth has been stagnant since 2012.
The government had talked about a new textile policy in February 2013, however there has been no progress. Unless effective steps are taken by the government to revive the industry, gains achieved in 2010 will be lost and result in job losses, thus aggravating the unemployment situation.
“Smuggled products occupy over 90% of the market. It is estimated that Nigeria imports N300 billion worth of textiles and garments annually, most of which are illegally imported without paying any duties and taxes.
“The total amount of revenue loss on account of customs duty and VAT on this volume is estimated at N75 billion. Such rampant evasion of taxes through smuggling when the government is mobilising revenue should be an eye opener.
There is a crisis in the textile industry due to huge backlog of Negotiable Duty Credit certificates (NDCC) accumulated over the last two years.
“This has been caused by an arbitrary suspension imposed by the Federal Ministry of Finance on utilisation of the certificates, issued by the same ministry, for duty payment. Textile manufacturers who exported their goods by factoring the grant in their price are facing a severe liquidity crisis.”