Textile exports crash 55.3% to N16.55bn as imports hit N1

Nigeria's textile industry has entered crisis territory. Fresh data from the National Bureau of Statistics reveals that textile exports plummeted 55.3% year-on-year in 2025, collapsing to just N16.55 billion (approximately €22 million) from N36.98 billion in 2024. Simultaneously, textile imports surged to N1.06 trillion, creating a devastating trade imbalance that exposes the sector's fundamental vulnerability and poses significant implications for European manufacturers and investors with exposure to West Africa's largest economy.

The scale of this deterioration is alarming. In a single year, Nigeria lost more than half its textile export capacity—a metric that signals not temporary market weakness but structural failure. For context, this represents a loss of roughly €25 million in annual export revenue, a devastating blow for an industry that once anchored Nigeria's manufacturing base and employed hundreds of thousands of workers. The simultaneous explosion in imports tells an equally troubling story: foreign textiles are flooding Nigerian markets while domestic producers cannot compete.

Several factors drive this crisis. First, Nigeria's currency depreciation against the dollar has made imported finished goods cheaper than domestically produced alternatives, despite the added cost of shipping. Second, chronic electricity shortages continue to cripple textile mills, making production costs uncompetitive internationally. Third, the sector suffers from outdated equipment, inadequate financing, and limited access to quality raw materials at global prices. Finally, policy inconsistency—including sudden tariff changes and port congestion—has created an unpredictable operating environment that deters both investment and production.

For European investors and entrepreneurs, this data presents a cautionary tale about Nigeria's manufacturing competitiveness. Companies that entered Nigeria's textile sector betting on local production for regional export have seen their assumptions evaporate. The apparent "opportunity" of a large domestic market is being undercut by the ease and affordability of direct imports, primarily from Asia.

However, the crisis also reveals misaligned incentives. The N1.06 trillion import figure suggests robust demand for textiles within Nigeria—demand that domestic producers cannot satisfy. This creates an immediate opportunity for import-focused businesses and distribution networks, but it decimates the case for manufacturing investment or backward integration into production.

The broader implication for European investors is that Nigeria's "manufacturing hub" narrative requires severe qualification. While the country possesses a large domestic market and labor advantages, fundamental infrastructure and policy deficits make it unreliable as a production base for regional or global supply chains. European firms should approach textile sector investments with extreme caution and focus instead on import distribution, retail, or specialized technical niches (e.g., industrial textiles) where local competition remains weak.

This sector collapse also signals broader macroeconomic stress. If textiles—a traditional bellwether of industrial health—are failing this dramatically, it raises questions about Nigeria's entire manufacturing competitiveness during a period of currency volatility and energy constraints.