AGRO-BASED INDUSTRIES AND THE PRODUCTION OF AGRO-BASED RAW MATERIALS: THE CASE OF COTTON IN NIGERIA

This study (i) describes the trends in output of the Nigerian textile industry, domestic cotton lint production, cotton lint importation, Foreign Private Investment (FPI) of the textile industry and the fixed assets of the Nigerian textile industry, and (ii) investigates the relationship between output of the textile industry and domestic cotton lint production, cotton lint importation, Foreign Private Investment (FPI) of the textile industry, and the fixed assets of the textile industry. Time series data (1974-2007) were collected and analyzed. Findings of the study includes: (i) accelerated growth in domestic cotton lint production (IGR 6.5%; CGR 6.7%) and fixed assets of the textile industry (IGR 4.8%; CGR 4.9%); and a corresponding significant deceleration of growth in output of the textile industry (IGR -2.4%; CGR -2.37%), foreign private investment on the textile industry (IGR -7.5%; CGR -7.2%). There was stagnation in cotton lint importation into Nigeria (IGR -3.2%; CGR -3.1%) over the period 1974-2007; (ii) there is a highly significant inverse relationship between output of the textile industry in Nigeria and both FPI and domestic cotton lint production; (iii) there is a highly significant relationship between output of the textile industry in Nigeria and both fixed assets and cotton lint importation. It is concluded that the textile industry in Nigeria has been declining in productivity and did not lead to any significant improvement in the domestic production of cotton in Nigeria, as it appears to depend on imported cotton lint for its production. The study recommended import restrictions, duties and levy on textile materials importation in to Nigeria.