The global fashion industry is expanding and many countries are cashing out, but Nigeria doesn’t seem to care!
The global fashion industry is expanding and many countries are cashing out, but Nigeria doesn’t seem to care! In 2022, Inditex, the parent company of the global fashion powerhouse Zara reported a profit of over 23 billion Euros. H&M’s profit was 7.2 billion Swedish kronor US$713million, while PVH (the owners of Calvin Klein and Tommy Hilfiger) was US$925million. Most other global fashion brands and retailers also recorded humongous profits.
The industry is regarded as a light manufacturing industry and relies substantially on raw materials that can be cultivated in commercial quantities in Nigeria (i.e. cotton). The other segment which involves the processing of cotton into yarns and fabrics is capital intensive. However, the level of capital required is much lower than that for heavy industries. Moreover, the processing capacity can be modular. The next segment is the making of apparel from fabrics. Apparels here include shirts, trousers, T-shirts and any other clothing that can be used in any part of the world. The major markets for apparel are Europe and the USA. The making of apparel is labour-intensive and this segment can employ several thousands of people. For example,?Arvind Ltd?employs more than 25000 people,?Vardhman Group?employs about 30000,??Noman Group?employs 70000, and?Brandix?employs about 55000. This just shows the employment opportunities that abound in the T&A industry.?
?In 2022, global exports from the T&A industry exceeded US$ 850 billion and several countries enjoyed enormous export revenues. China’s T&A export was over US$ 300 billion, Vietnam exported about US$ 45 billion worth of items in the T&A industry, and India exported about US$38 billion worth of textiles and apparel. In the same year, Nigeria’s largest export which accounted for about 90.73% of export revenues was crude oil US$57.54 billion. In other words, exports from just the textile and apparel industry can be a major source of foreign exchange earnings for Nigeria.
However, to possibly reap the benefit of this, Nigeria will need a lot of investment in export logistics infrastructure. The T&A industry is buyer-driven and timely delivery of orders that meet design specifications and quality is crucial. Most top brands in Europe and America have downlines and suppliers in developing countries and require that their suppliers deliver orders which can be tens of thousands of clothing items in a very timely manner – often in less than a month (the countries that supply Primark are shown?here). This means that suppliers need to also arrange their own supply logistics (e.g. labels, zippers, buttons for producing apparel) within this short period. The grossly inefficient nature of Nigerian export logistics (especially ports) will be a huge barrier in this situation.?
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Nigeria urgently needs to diversify its economy and the T&A industry presents a huge opportunity. The challenges are not beyond the realms of pragmatic solutions in terms of formulating bespoke industrialization strategies that suit the unique situation and needs of Nigeria, as well as strategic investments in core infrastructure to support the specific needs of the T&A industry.
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N/B: Export data are from UN Comtrade. T&A is represented by HS 50-63, Crude oil is represented by HS 27
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