Trade Liberalisation and Deindustrialisation of the Textile Industry in Nigeria (1997-2000)

Abstract

In compliance with the spirit of trade liberalisation and the subsequent implementation of the World Trade Organisation (WTO) Agreement of which Nigeria was a signatory the Nigerian textile industry was adversely affected. To make matters worse, on the January 1, 1997, the nation was informed during the fiscal policy announcement that the ban on importation of textiles and some other items was lifted. Trade liberalisation became harmful to Nigerian textile industry because of the inadequacies of the local economy and bad infrastructure which leads to high cost of production. This article examines the relationship between trade liberalisation and the dwindling fortune of textile industries in Nigeria. In this direction, the researcher compares financial data of a period of four years before textile import was liberalised, and four years during the period of trade liberalisation. To achieve this, financial records of five most viable textile companies were analysed. The analysis involved data of four years before trade liberalisation 1993 to 1996. These financial data were compared with data of four years during the period of trade liberalisation 1997 to 2000. Through this analysis, a trend emerged which supported the argument of the devastating effect of trade liberalisation to the fortune of textile industry in the country. The study recognised that the adoption of the neoliberal policies by Nigeria brought about low sales, low profit, low dividend and share. The case of the textile industry in Nigeria as result of trade liberalisation is a case of deindustrialisation. The industry lacks the wherewithal to reap the gains of globalisation substantially. This paper is an effort to call on policymakers to create an enabling environment for the industry to recover from its huge and cumulative losses.