Smuggling has hit the Nigerian textile industry hard. The cost of manufacturing textiles in Nigeria is too high, allowing room for cheap foreign goods to be imported. Smuggled products occupy over 90 per cent of the market. There is also an influx of counterfeit textiles into the country.

The textile industry wants a protectionist policy. The key problems facing the industry relate to infrastructure, raw materials and electricity supply. The country had about 175 textile factories in the 1980s which went down to 124 in 1994, and 70 in 2002. At the moment, there are only 10 textile mills in the country. A ban on import of textile products was revoked and that paved the way for dumping all sorts of textile products in the country. Industry says indiscriminate imports have destroyed the mills and led to job losses. Smuggling is also blamed for tax evasion.

Companies want the government to protect them from foreign competitors. They say reviving the industry would reduce the foreign exchange spent annually on the import of textile materials. They want tariffs on textile raw materials, such as polyester fiber and pigments, to be removed. Another demand is a ban on imports of some categories of printed fabrics to protect the domestic industry.