Nigeria’s Textile Industry Declines as GDP Contribution Drops 3.6% in Two Years
Nigeria’s textile sector, once regarded as one of the strongest pillars of the country’s manufacturing industry, continues to experience a persistent decline as its contribution to the nation’s Gross Domestic Product (GDP) dropped by 3.6 percent within two years.
Recent data from the National Bureau of Statistics indicates that the cotton, textile and garment segment of the economy has struggled to maintain growth amid mounting structural challenges affecting domestic manufacturing and industrial competitiveness.
Statistics released by the NBS show that the sector’s output declined from about N4.548 trillion in 2023 to N4.476 trillion in 2024 before falling further to approximately N4.384 trillion in 2025.
The steady drop represents a 3.6 percent contraction over the two-year period, reflecting the continued pressure facing Nigeria’s textile industry. The decline also translates to an estimated N164 billion loss in output value during the same period, highlighting the magnitude of the sector’s weakening performance in the broader economy.
The downturn reinforces a longer-term trend that has seen Nigeria’s textile and garment industry gradually lose its position as a major industrial employer and contributor to economic output.
Decades ago, the sector was one of the largest manufacturing employers in the country, operating more than 180 textile mills and supporting a vast supply chain that included cotton farmers, ginneries, fabric producers and garment manufacturers. Today, fewer than 20 textile mills remain operational, with many factories either shut down or operating far below their installed capacity due to unfavourable operating conditions.
Industry experts attribute the persistent contraction to a combination of structural and economic challenges that continue to weaken domestic textile production. One of the most significant constraints is the high cost of production in Nigeria’s manufacturing environment.
Textile manufacturers often rely heavily on diesel-powered generators due to unstable electricity supply, pushing up operational expenses and reducing profitability. Additionally, access to affordable financing remains limited, with manufacturers frequently borrowing from banks at high interest rates that further increase production costs.
Foreign exchange volatility has also worsened the sector’s challenges. Many textile manufacturers depend on imported machinery, chemicals and other raw materials that require foreign currency to purchase.
With exchange rate instability and limited access to foreign exchange, production costs have continued to rise, making locally manufactured textiles less competitive compared to imported alternatives. The growing influx of cheaper textile imports, both legal and smuggled, has significantly eroded the market share of domestic producers and weakened demand for locally manufactured fabrics.
Another major factor affecting the industry is the decline in cotton production, which serves as the primary raw material for textile manufacturing. Cotton farming in several northern states has been affected by insecurity, limited investment, and declining profitability for farmers. As a result, many textile manufacturers struggle to source sufficient raw materials locally, forcing them to rely on imports or scale down production activities.
The consequences of the sector’s decline extend beyond manufacturing output to employment and industrial development. At its peak, Nigeria’s textile industry employed more than 500,000 workers across the value chain, including farmers, factory workers, traders and designers. The collapse of many textile mills over the past decades has resulted in massive job losses and weakened industrial capacity in key manufacturing hubs such as Kaduna, Kano and Lagos.
Despite the persistent challenges, stakeholders remain optimistic that targeted policy interventions could help revive the industry.
The Federal Government has recently initiated efforts aimed at revitalising the cotton, textile and garment value chain as part of a broader industrialisation strategy. Among these initiatives is the proposed establishment of a Cotton, Textile and Garment Development Board designed to coordinate policies and investments across the sector.
In addition, government authorities are pushing for stricter enforcement of policies that promote local manufacturing and patronage of domestically produced textiles.
One of such policies is Executive Order 003, which encourages ministries, departments and agencies to prioritise locally made goods in public procurement. Supporters of the policy argue that stronger enforcement could stimulate demand for Nigerian-made fabrics and help revive local textile mills.
Industry groups, including the National Union of Textile, Garment and Tailoring Workers of Nigeria, have welcomed recent government initiatives aimed at addressing the sector’s long-standing challenges.
According to the union, strategic policy reforms, improved infrastructure and stronger support for domestic manufacturing could help restore the textile industry’s role as a key driver of employment and industrial growth in Nigeria.
Analysts note that revitalising the textile industry will require a comprehensive strategy that addresses energy supply, access to finance, security in cotton-producing regions and the control of textile smuggling. Without these structural reforms, the sector may continue to struggle despite policy announcements and government support programmes.
As Nigeria seeks to diversify its economy beyond oil and strengthen domestic manufacturing, the revival of the textile sector remains critical. The industry has historically served as a major contributor to industrialisation, job creation and export potential. Reversing the recent decline in its GDP contribution will therefore be essential for boosting manufacturing growth and achieving sustainable economic development in Africa’s largest economy.
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