US embassy cable - 04LAGOS2395

UNCLAS LAGOS 002395 
 
SIPDIS 
 
STATE PLEASE PASS TO USTR 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, EIND, NI 
SUBJECT: NIGERIAN TEXTILE MANUFACTURER UNDULY 
OPTIMISTIC ABOUT AGOA 
 
 
1. (U) Summary.  The US Trade and Investment Framework 
Agreement (TIFA) delegation and Mission econoffs 
visited a textile manufacturer in Zaria 13 November. 
A.K. Mansoori, Managing Director of Anamruh Limited, 
assured the visitors that Nigerian textile 
manufacturers will soon take advantage of AGOA 
opportunities.  It is more likely, however, the 
manufacturers may find the hurdles to market entry too 
daunting to overcome.  End Summary. 
 
2. (U) The US delegation to the November 11 Trade and 
Investment Framework Agreement (TIFA) talks in Abuja, 
and Econoffs from Abuja and Lagos traveled to Zaria, 
Kaduna State, November 12 to meet with a Nigerian 
textile manufacturer, A.K. Mansoori, Managing Director 
of Anamruh Limited, and hear his views on taking 
advantage of AGOA opportunities. 
 
3. (U) Mansoori said the stumbling block to successful 
Nigerian textile exportation is lack of affordable 
financing.  He said this prevents manufacturers from 
investing in newer technologies to produce high-quality 
textiles at competitive world prices.  When asked about 
other competitive disadvantages like lack of skilled 
workers, trained management, and the poor 
infrastructure in Nigeria, Mansoori gave no 
satisfactory reply.  Instead, he dwelled on the 
sector's arguable potential to take advantage of AGOA 
export opportunities if it had access to capital. 
 
4. (SBU) Comment: Even with the AGOA textile visa, it 
is unlikely that Nigeria's textile sector will be 
competitive on the world market.  In addition to 
interest rates at 20-30 percent, non-competitive labor 
force and the excessive costs of power and transport 
continue to hinder manufacturers. 
 
5. (SBU) Comment continued: Over the past decade, 75 
percent of Nigerian textile factories have shut down 
nationwide.  The remaining manufacturers are holding 
out, hoping for better days ahead.  AGOA and the 
textile visa have offered hope -- albeit a thin one. 
The GON is sustaining this optimism by singling out the 
textile sector as its key focus under AGOA.  For any 
positive movement, however, the GON would have to 
invest more heavily in infrastructure and banks would 
have to lower interest rates.  For both to happen at 
the same time would require not only the political will 
and economic commitment of the GON, it would take a 
degree of government and private sector coordination 
that has heretofore been lacking.  Despite Mansoori's 
optimism, we do not see this as being in the cards. 
Nigeria's textile industry will likely continue to 
flounder despite AGOA access.  Perhaps Mansoori summed 
up the quandary best when he stated: "The reason for 
the failure of Nigeria is the Nigerian factor."  End 
comment. 
 
6. (U) This cable has been cleared by Embassy Abuja. 
 
BROWNE