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Cablegate: Nigerian Textile Manufacturer Unduly

This record is a partial extract of the original cable. The full text of the original cable is not available.

291027Z Nov 04

UNCLAS LAGOS 002395

SIPDIS

STATE PLEASE PASS TO USTR

E.O. 12958: N/A
TAGS: ETRD ECON EIND NI
SUBJECT: NIGERIAN TEXTILE MANUFACTURER UNDULY
OPTIMISTIC ABOUT AGOA


1. (U) Summary. The US Trade and Investment Framework
Agreement (TIFA) delegation and Mission econoffs
visited a textile manufacturer in Zaria 13 November.
A.K. Mansoori, Managing Director of Anamruh Limited,
assured the visitors that Nigerian textile
manufacturers will soon take advantage of AGOA
opportunities. It is more likely, however, the
manufacturers may find the hurdles to market entry too
daunting to overcome. End Summary.

2. (U) The US delegation to the November 11 Trade and
Investment Framework Agreement (TIFA) talks in Abuja,
and Econoffs from Abuja and Lagos traveled to Zaria,
Kaduna State, November 12 to meet with a Nigerian
textile manufacturer, A.K. Mansoori, Managing Director
of Anamruh Limited, and hear his views on taking
advantage of AGOA opportunities.

3. (U) Mansoori said the stumbling block to successful
Nigerian textile exportation is lack of affordable
financing. He said this prevents manufacturers from
investing in newer technologies to produce high-quality
textiles at competitive world prices. When asked about
other competitive disadvantages like lack of skilled
workers, trained management, and the poor
infrastructure in Nigeria, Mansoori gave no
satisfactory reply. Instead, he dwelled on the
sector's arguable potential to take advantage of AGOA
export opportunities if it had access to capital.

4. (SBU) Comment: Even with the AGOA textile visa, it
is unlikely that Nigeria's textile sector will be
competitive on the world market. In addition to
interest rates at 20-30 percent, non-competitive labor
force and the excessive costs of power and transport
continue to hinder manufacturers.

5. (SBU) Comment continued: Over the past decade, 75
percent of Nigerian textile factories have shut down
nationwide. The remaining manufacturers are holding
out, hoping for better days ahead. AGOA and the
textile visa have offered hope -- albeit a thin one.
The GON is sustaining this optimism by singling out the
textile sector as its key focus under AGOA. For any
positive movement, however, the GON would have to
invest more heavily in infrastructure and banks would
have to lower interest rates. For both to happen at
the same time would require not only the political will
and economic commitment of the GON, it would take a
degree of government and private sector coordination
that has heretofore been lacking. Despite Mansoori's
optimism, we do not see this as being in the cards.
Nigeria's textile industry will likely continue to
flounder despite AGOA access. Perhaps Mansoori summed
up the quandary best when he stated: "The reason for
the failure of Nigeria is the Nigerian factor." End
comment.

6. (U) This cable has been cleared by Embassy Abuja.

BROWNE

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