LAGOS: For the 4,000 workforce, the closure of the 43-years-old United Nigerian Textiles Limited (UNTL), Kaduna, has come as a rude shock. The rumour of an imminent closure of the factory was rife for long.
It was nevertheless unexpected to economy watchers as many other players in the sector had long gone under. It was seen as the final death knell on the textile sub-sectors of the Nigerian economy.
The closure of the factory has sunk thousands of their dependants deeper into grief and misery. UNTL is famed for its ability to survive having managed to remain in business in spite of the turbulent times that enveloped the textile sector for many years:
Before its closure, the company produced at 30 per cent installed capacity as many of the workers were sent away on compulsory leave. Some 200 other textile companies in the country have suffered similar fate in the past. Analysts say that the textile sector had played significant role in the economy of the country.
This is particularly so in the northern states between the 1960s and 1980s. Records from the National Bureau of Statistics say that the sector employed more than one million workers at its peak.
Other popular textile industries include Arewa, Supertex, Nortex, Unitex and Finetex. By the beginning of the 1980s, there were 200 mills nationwide, with a reported annual combined turn-over of more than N25 billion.
For many of the unfortunate employees of the textile industries, the closure, though not unexpected, is the beginning of a journey to economic uncertainty.
But job losses are only one aspect - of the many implications of the collapse of the textile industries. For instance, records at UN show that the company paid N50 million monthly for electricity consumption to PHCN. It also paid N30 million monthly for water usage, and an average N60 million in customs duty.
The records also show that the company remitted some N30 million monthly to the Kaduna State government as PAYE taxes for its 4,000 workforce.
The military government’s infamous Structural Adjustment Programme (SAP) removed all barriers to trade as well as subsidies on goods and services. SAP opened the floodgates for goods from Asian companies. Backed by their comparative advantages like good infrastructure, better import incentives and cheap labour, the Chinese firms flooded Nigeria’s markets with all kinds of cheap materials.
This threw the local textile out of the market.
The government has now placed a ban on imported fabrics. The government has also directed that all para-military services must source their uniforms from Nigerian textiles. To enforce compliance, the government ordered raids on warehouses to seize contraband textile goods. Early in 2006, the government initiated a N70 billion credit facility for revamping of textile industries.
Reviving the textile industries should be a’ priority if the government is serious about creating jobs and reducing poverty in the land. The Federal Government should prioritise the revival of textile industries in its Vision 2020 if it really wants to lift the economy to one of the top 20 in the world by that year. The industry would provide direct jobs to industrial workers as well as cotton farmers.