The Federal Government is considering modernising 50 per cent of Nigeria’s operational textile capacity with state-of-the-art equipment within five years as part of a broader revitalisation agenda. This follows a recent report by The PUNCH that textile imports rose to N814.27bn in the first nine months of 2025, despite the government’s promises to turn the sector around.

This upgrade is part of the government’s internal plans to introduce tax breaks, establish a national textile training institute, and provide single-digit interest rate loans to revive the textile industry.

The proposals, contained in a December 2025 document obtained by The PUNCH, showed that the government is considering modernising 50 per cent of Nigeria’s operational textile capacity with state-of-the-art equipment within five years as part of a broader revitalisation agenda.

The document, titled “Annex I: Recommendations for the Revitalisation of the CTG Sector,” was authored by the Cotton, Textile and Garment Division of the Industrial Development Department, Federal Ministry of Industry, Trade and Investment.

It detailed recommendations, actionable plans, and key performance indicators across five strategic areas, including policy reforms, infrastructure and energy solutions, investment incentives, skills development, and measures to curb smuggling and promote local patronage.

Under a proposed Textile Modernisation Fund, the government plans to establish a specialised fund of about N500bn to be administered by the Bank of Industry to provide long-term loans of seven to 10 years, with a minimum two-year moratorium, at single-digit interest rates.

The document stated that the loans would support the “procurement of modernised or state-of-the-art machinery and parts,” with a key performance target of ensuring that “50 per cent of operational textile capacity is modernised with state-of-the-art equipment within five years.”

On energy costs, the government said it is considering tax holidays or subsidies for textile mills that invest in renewable energy solutions such as solar, biomass, or waste-to-energy systems. It set a target for “25 per cent of textile mills to transition to hybrid or renewable energy sources within three years.”

The government also proposed tax incentives to attract fresh capital into the sector. It said it is considering five to seven years of corporate tax holidays for new textile investments above a defined capital threshold, such as $10m, especially for firms that source at least 70 per cent of their raw materials locally. The plan aims to drive a “30 per cent increase in foreign direct investment into the textile sector within three years.”

The PUNCH understands that none of the plans are concrete yet. In addition, the document recommended a 100 per cent import duty and VAT waiver on industrial machinery, spare parts, and specialised chemicals not produced locally. It was projected that the measure would reduce initial capital expenditure for new textile mills by 20 to 25 per cent.

On skills development, the government proposed revamping or establishing a dedicated National Textile Training Institute to focus on modern competencies such as digital technology, industrial sewing, dyeing chemistry, and equipment maintenance.

The plan targets the training of “2,000 certified skilled textile workers and technicians annually after the first two years.” In a telephone interview with The PUNCH, the Director-General of the Nigerian Textile Manufacturers Association, Hamma Kwajaffa, welcomed the plans as a positive shift from previous government responses.

“The actionable plans under the recommendation are excellent,” he said. “Had we known that things were happening like this, I would have just told you that something was going on, but because it was not put on paper, these plans could not quickly reduce the textile import surge.”

He added that once approved and implemented, the measures could significantly reverse the rising import trend. “Most of the problems we are facing, particularly the increase in imports, will drastically reduce when these things are approved and put in action,” he said.

Kwajaffa confirmed that officials sent him the document after reading his earlier interview with The PUNCH, saying it revealed a communication gap between government and industry operators.

“They sent me the documents on WhatsApp. They read the interview and felt there had been a communication gap,” he said. “They said there is work in progress and that even the Office of the Vice President is concerned, which is why this paper has been developed.”

On financing, Kwajaffa said the proposed Textile Modernisation Fund would be more sustainable than past interventions, citing the N100bn textile fund introduced in 2009 through the Debt Management Office.

The Textile Manufacturers’ chief explained: “Because it was a DMO loan, it could not be a revolving loan. There was no continuity. If we now have a government fund administered by the Bank of Industry at single-digit interest rates, it will be dependable, continuous, and revolving.”

He also endorsed the plan for a national textile institute, describing it as “excellent” and “the kind of bankable institute we require.” “This is purely in theory, and it is a welcome development because it will flow directly back to the industry through staff training and skills upgrading,” Kwajaffa said.

He urged the government to sustain communication with stakeholders to ensure timely implementation. “There should be continuity of communication so that once questions come from the media or outsiders, everyone knows these things are doable,” he said.

The government’s response followed earlier reports by The PUNCH that Nigeria’s textile imports climbed to N814.27bn between January and September 2025, underscoring the weakness of local production.

Data from the National Bureau of Statistics showed that textile and textile article imports stood at N228.83bn in the first quarter of 2025, N337.12bn in the second quarter, and N248.32bn in the third quarter.

Industry operators told The PUNCH that the surge reflected policy failures, weak execution of credit initiatives, poor access to affordable finance, abandonment of promised institutional reforms, and structural challenges such as insecurity, weak cotton farming, and limited local polyester production.

Kwajaffa had earlier criticised policy incoherence within the government, lamenting that conflicting positions among top officials stalled action. He later clarified that the disagreement centred on whether to establish a board or a council to drive textile reforms, noting that neither option had materialised.

“When I mentioned in the interview that it seemed that the Vice President Kashim Shettima and the Minister of State for Industry, John Enoh, were saying different things, I meant that the VP, through the National Economic Council, wanted the establishment of a board while the minister preferred the establishment of a council, but neither has materialised, he said.

“I also spoke about the multiplicity of boards and parastatals, which the Orosanye panel may have contributed to the non-establishment of any agency to date.”