US embassy cable - 04LAGOS457

UNCLAS SECTION 01 OF 02 LAGOS 000457 
 
SIPDIS 
 
STATE PLEASE PASS TO USTR C. HAMILTON 
 
E.O. 12958: N/A 
TAGS: KTEX, ETRD, EINV, ECON, PREL, NI, AGOA 
SUBJECT: NIGERIA: AGOA III: INFORMATION ON TEXTILE AND 
APPAREL PRODUCTION CAPABILITIES 
 
REF: (A) STATE 26964, (B) 03 Abuja 1972 
 
1. (U) Summary: Nigeria's textile and apparel industry 
is uncompetitive and in decline, and manufacturers are 
skeptical about the possibilities of reversing the 
industry's long downward trend.  Nigerian producers are 
not yet eligible for AGOA textile and apparel benefits, 
and most believe that AGOA alone will not bring about a 
substantial increase in their textile or apparel trade 
(Ref B).  Many are leaving the business, with 
corresponding negative upstream effects on Nigerian 
cotton producers.  End summary. 
 
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TEXTILE PRODUCTION FACILITIES 
----------------------------- 
 
2. (U) Over the last ten years, many of Nigeria's 
textile mills have permanently shut down.  Membership 
in the Nigerian Textile Manufacturers Association 
(NTMA) has declined from 124 members in 1994 to fewer 
than 60 today; most remaining mills are operating at 
only 60 or 70 percent capacity.  The industry has shed 
more than 60,000 of its 140,000 jobs, and most 
observers expect further decline. 
 
3. (U) Nigerian spinning, weaving, and processing 
facilities are fully mechanized, but equipment is often 
outdated and poorly maintained.  According to NTMA's 
executive director, Nigerian spinning facilities have 
810,000 spindles and 26,000 open-ended rotors.  The 
country's weaving facilities, he says, have 16,840 
shuttle looms and 2,640 shuttle-less looms and produce 
approximately 450 million meters of gray cloth 
annually.  Most Nigerian textile manufacturers import 
ginned cotton from neighboring countries, but some, 
like locally owned Nigerian Textile Mills and part 
Indian owned Afprint, operate domestic cotton 
plantations and ginneries.  A handful of firms also 
produce polyester yarns and fabrics. 
 
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APPAREL PRODUCTION FACILITIES 
----------------------------- 
 
4. (U) Nigeria has no organized apparel industry.  Most 
garments are produced by individual tailors or by small 
businessmen working with one or two assistants and a 
handful of sewing machines.  Locally produced or 
imported cotton fabric is the most common input, with 
imports coming chiefly from ASEAN countries.  These 
should decline after the GON's January 2004 ban on 
textile imports.  Finished products range from 
traditional dress to designer clothes geared toward 
Nigeria's affluent. 
 
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TARGET MARKET FOR FINISHED PRODUCTS 
----------------------------------- 
 
5. (U) According to NTMA's executive director, 65 
percent of Nigeria's textile production, mostly cotton 
or polyester yarn and gray cloth, is sold domestically, 
with the remaining 35 percent exported to neighboring 
countries or Europe (primarily Italy, Spain, and 
Portugal).  Yarn produced from Nigerian cotton is often 
exported as discounted non-dying yarn due to 
contamination by fibers from cotton pickers' 
polyethylene bags.  None of Nigeria's finished products 
are exported to the U.S. 
 
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COMMENT 
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6. (U) Nigerian textile manufacturers are uniformly 
bleak about the prospects of turning around a declining 
industry.  High input prices, unreliable power 
supplies, and poor transportation infrastructure have 
forced many producers to close their doors, and many 
observers expect further decline, particularly since 
attracting new investment has become increasingly 
difficult.  Nigerian producers are not yet eligible for 
AGOA textile and apparel benefits, and few producers 
have expressed interest in expanding textile or apparel 
manufacturing facilities.  Unless Nigeria secures AGOA 
textile and apparel certification or sees its main 
textile products, cotton yarn and gray cloth, become 
eligible for duty-free treatment, the legislation's 
extension is unlikely to have much impact. 
 
GREGOIRE