Nigerian Textile, Apparel & Footwear Sub-Sector: Neat Needlework Required…

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The textile, apparel and footwear sub-sector remains the second largest contributor to Nigeria’s manufacturing (after food, beverage and tobacco). It posted the total output of N383bn (US$1.3bn) in Q4 2017 or 23.3% of manufacturing GDP.

The segment grew by 1.6% y/y in Q4 2017, compared with 1.1% recorded in the corresponding period of the previous year (see chart). Given Nigeria’s huge appetite for fashion and related industries, the segment is still performing well below its full potential.

  • Industry sources suggest that the country’s annual import bill for textiles and ready-to-wear apparel is US$4bn. Meanwhile, trade statistics from the NBS tell a different story, with imports of textile and clothing items of N37bn (US$121m) in Q4.
  • Despite the naira depreciation, there is still an influx of imported ready-to-wear garments. The Nigerian Textile Manufacturers Association estimates an annual bill of US$1.2bn from smuggled apparel.
  • There are concerns around the recent signing of the pact forming the African Continental Free Trade Area (AfCFTA) in Kigali. Stakeholders within Nigeria’s textile, apparel and footwear industry are convinced that if the FGN signs this agreement, it would have an adverse effect as it could accelerate the importation of cheaper imported textiles and garments.
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Sources: National Bureau of Statistics (NBS); FBNQuest Capital Research
  • We understand that the FGN has kicked off the creation of special economic zones (SEZs), starting with a zone for garment manufacturing. On a macro level, this should attract investment within the sector, boost output and assist with easing pressure on the job market.
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