How Chinese fake textiles put thousands on Nigeria’s streets

91 Views Comments

THE chief of the border post let out another long sigh. “On attend (wait).” The wait had already lasted hours. Not for the first time I was at the mercy of a temperamental fax machine. I was trying to cross the Nigerian border with its northern neighbour, Niger.

Someone in the visa section of Niger’s embassy in Nigeria had neglected to send some document to headquarters to authorise my visa, and faxing it over was proving complicated.

Whiling away the morning in 2010 beside the taciturn border chief offered me an opportunity to observe one of the few effective institutions in this part of the world: the smuggling racket.

Dozens of trucks were queuing to cross from Niger into Nigeria. Their contents seemed harmless enough: many contained textiles and clothing bound for the markets of Kano and Kaduna, northern Nigeria’s two main cities.

Weapons and unwilling human traffic cross Nigeria’s northern border covertly. But the flow of counterfeit Chinese-made textiles has grown so voluminous that it would be impossible to keep it secret, even if secrecy were required to ensure its safe passage. All the same, most of the shipments go through under cover of darkness.

Those who control the trade engage in highly organised “settling”, or bribing, of the border officials, smoothing the textiles’ transit. The Nigerian stretch is the final leg of a 10,000km journey.

It begins in Chinese factories, churning out imitations of the textiles that Nigerians previously produced for themselves, with their signature prime colours and waxiness to the touch.

By the boatload they arrive in West Africa’s ports, chiefly Cotonou, the capital of Benin, a tiny country beside Nigeria whose major economic activity is the trans-shipment of contraband.

The trade is estimated to be worth about $2bn a year, equivalent to about a fifth of all annual recorded imports of textiles, clothing, fabric and yarn into the whole of sub-Saharan Africa.

Smuggling is a long-established profession here. Before colonial cartographers imposed the frontier, today’s smuggling routes were the byways of legitimate commerce. The border marks a delineation of what used to be British and French territory in West Africa, but no natural division of language or ethnicity exists. People on both sides speak Hausa, a tongue in which the word for smuggling, sumoga, strikes a less pejorative note than its English equivalent.

Not being a roll of fake West African fabric, I was not a priority for processing. Eventually the border chief’s phone rang. Off we trundled, past trucks with “Chine” daubed on the side, a brazen reference to their cargo’s origin. Another name went unrecorded, that of the trucks’ proprietor.

Few dare to speak it openly here. But further to the south, where the truckloads of counterfeit textiles have helped to wreak economic destruction, I had heard it whispered a year earlier.

Kaduna is the gateway between the Christian south and the northern half of the country, an expanse that stretches up to the border with Niger and largely follows Allah. The city lies in the turbulent Middle Belt, prone to spasms of communal violence when patronage politics, dressed in the garb of religion or ethnicity, turns bloody.

On a stifling Sunday morning, a friend took me around Kaduna’s central market, a teeming grid of wooden booths. Many of the stalls were selling clothes.

Some bore the misspellings that are counterfeiters’ inadvertent trademark: “Clavin Klein” read one shirt label.

Others carried the equivalent of the appellation d’origine controlee badges that French vineyards and cheese makers append to their produce. “Made in Nigeria,” the labels declared. But they were fake too.

Aike, a young trader from the east, told me he stocked up on bogus labels when he went north to Kano to replenish his supplies of lace. “Mostly everything is made in China,” explained another trader selling jeans.

At Raymond Okwuanyinu’s stall I found rolls and rolls of the coloured fabric that is used for fashioning a popular style of billowing trousers. Here there was no attempt at subterfuge. Mr Okwuanyinu said it was a matter of simple economics.

Nigeria may be the largest source of African energy exports, but it generates only enough electricity to power one toaster for every 44 of its people. Billions of dollars assigned to fix the rundown power stations and the dilapidated grid have been squandered or pilfered.

Even those lucky enough to be connected to a functioning cable face the maddening task of negotiating with what used to be called the National Electric Power Authority or Nepa (but known as Never Expect Power Anytime).

It was rebranded as the Power Holding Company of Nigeria, or PHCN (Please Have Candles Nearby or, simply, Problem Has Changed Name).

Most must make do with spluttering diesel generators. In a country where 62% of people live on less than $1.25 a day, running a generator costs about twice as much as the average Briton pays for electricity. The crippling cost of electricity makes Nigerian textiles expensive to produce.

Mr Okwuanyinu, the Kaduna trader, said he could sell trousers made from Chinese fabric at two-thirds the price of those made from Nigerian fabric and still turn a profit.

Hillary Umunna, a few stalls over, concurred. The government’s attempt to support the Nigerian textile sector by banning imports was futile, Mr Umunna opined, his tailor’s tape-measure draped around his shoulders. “These things now,” he said, gesturing at his wares, “they say it is contraband. They can’t produce it, but they ban it. So we have to smuggle.

“It is a pitiable situation,” said Mr Umunna, apparently oblivious to his and his colleagues’ role in their compatriots’ downfall. “All the (textile factories) we have here have shut down. The workers are now on the streets.”

In the mid-1980s Nigeria had 175 textile mills. Over the quarter-century that followed, all but 25 were shut down. Many of those that have struggled on do so only at a fraction of their capacity. Of the 350,000 people the industry employed in its heyday, making it comfortably Nigeria’s most important manufacturing sector, all but 25,000 have lost their jobs.

Imports comprise 85% of the market, despite the fact that importing textiles is illegal. The World Bank has estimated that textiles smuggled into Nigeria through Benin are worth $2.2bn a year, compared with local Nigerian production that has shrivelled to $40m annually.

A team of experts working for the United Nations concluded in 2009: “The Nigerian textile industry is on the verge of a total collapse.” Given the power crisis, the near-impassable state of Nigeria’s roads and the deluge of counterfeit clothes, it is a wonder that the industry kept going as long as it did.

The knock-on effects of this collapse are hard to quantify but they ripple far into the Nigerian economy, especially in the north. About half of the million farmers who used to grow cotton to supply textile mills no longer do so, although some have switched to other crops. Formal jobs in Nigeria are scarce and precious. Each textile employee supports maybe half a dozen relatives. It is safe to say that the destruction of the Nigerian textile industry has blighted millions of lives.

After I left Kaduna’s market, my friend took me to meet some of those who had felt the industry’s collapse hardest. Sitting around on rickety desks in the half-light of a classroom beside the church where some of Kaduna’s Christians were loudly asking a higher power for succour, nine redundant textile workers poured forth their woes. Shuffling their feet and looking warily around for anyone who might be eavesdropping, the men murmured a single word: “Mangal.”

Alhaji Dahiru Mangal is a businessman, a confidant of presidents, a devout Muslim and a philanthropist whose airline transports Nigerian pilgrims to the annual hajj in Mecca. He also ranks among West Africa’s pre-eminent smugglers.

He got his start as a teenager in the 1980s, following his father into the import-export business, and he swiftly made the cross-border freight routes his own.

“The Chinese attacked at the heart of the industry: the wax-print and African-print segment,” was the explanation from a consultant who has spent years investigating — and trying to reverse — the slow death of Nigerian textiles.

During the 1990s Chinese factories began copying West African designs and opening their own distribution branches in the region. “This is 100% illicit — but the locals do the smuggling,” the consultant went on. There are, he said, 16 factories in China dedicated to churning out textiles with a “Made in Nigeria” badge sewn in.

For a time the Chinese material was of a much lower quality than Nigerian originals, but that gap narrowed as Chinese standards rose. The Chinese began to take control of the market, in league with Nigerian vendors. Mr Mangal acts as the facilitator, the conduit between manufacturer and distributor, managing a shadow economy that includes the border authorities and his political allies.

Around 2005, Olusegun Obasanjo, the former military ruler then embarking on his second term as elected president, decided to do something about smuggling and the damage it was causing to the textile industry.

Mr Obasanjo dispatched Nasir el-Rufai, a northern-born minister with a reputation as a reformer, to try to get Mr Mangal to clean up his act. Mr Rufai told me that Mr Mangal asked him: “Why does Obasanjo call me a smuggler? I just do logistics. I don’t buy any of the goods that are smuggled. I’m just providing a service.”

(I tried unsuccessfully to arrange an interview with Mr Mangal. He did not respond to questions sent to his representative.)

Mr Mangal and the rest of northern Nigeria’s crime lords can trace their hegemony — and the abandoned textile workers their strife — to the discovery of oil in the Niger Delta.

Oil has so corrupted Nigeria that, for those trying to make an honest buck, the outlook is dispiriting. In Nigeria the sale of crude oil and natural gas generates about 70% of government revenue; in newborn South Sudan the figure is 98%.

Taxes, customs receipts and revenue from the sale of state assets — on which industrialised nations rely to fund the state and that require the acquiescence of the population — matter far less than keeping the resource money flowing. Nigeria’s gross domestic product recalculation last year showed that, once taxes from the oil sector were removed, the government relied on the people for just 4% of its income.

The pattern was the same as in Angola or the Democratic Republic of Congo: the more Nigeria’s non-oil economy withered, the greater the impulse to embezzle, perpetuating the cycle of looting.

The deterioration of northern Nigeria’s textile industry created new demand for imported clothes and fabrics, strengthening Mr Mangal’s stranglehold on the market and throttling the indigenous industry’s chances of resuscitation.

For the likes of Boko Haram, the northern Islamist terrorists linked to al-Qaeda who have proved more than a match for the security forces, the corruption of the state and the lack of economic opportunity serve as recruiting sergeants. From its heartland in the remote northeast, its fighters bombed cities and burned villages across the north.

The sheer scale of Mr Mangal’s smuggling operation gave him sway over Nigeria’s northern borderlands, and many of the north’s senior politicians were, I was told, in his pocket. “So many people are benefiting from the (customs) service the way it is and they want to keep it like this,” says Yakubu Dogara, a northern member of Nigeria’s national assembly who had chaired an inquiry into the customs service.

I asked him about Mr Mangal’s role, suggesting he was at the centre of the smuggling operation. “Some of the perpetrators are well known,” Mr Dogara said. “Even the customs know them. But they are not empowered to go after them.”

He paused. “The person you have just mentioned is untouchable, untouchable.”

By funding Umaru Yar’Adua’s successful campaigns for governor of his home state, Katsina, and then for the presidency, Mr Mangal had ensured he had a protector at the top of the rentier class that uses Nigeria’s oil to maintain its hegemony.

Goodluck Jonathan assumed the presidency when Mr Yar’Adua fell fatally ill in 2010, becoming the first son of the Niger Delta to hold the highest office. He knew better than to start picking fights with a smuggler who had proved himself a generous benefactor to the People’s Democratic Party in the past.

Even if the day comes when Mr Mangal’s smuggling empire topples, it would be a monumental task to salvage what remains of northern Nigeria’s textile industry, let alone return it to its former glory. It is the structure of an economy in thrall to oil, more than any one crime lord, that condemned those mill hands to penury. Nigeria has paid quite a price for the dubious honour of being the continent’s biggest oil producer.

© Financial Times Limited

• Extracted from The Looting Machine: Warlords, Tycoons, Smugglers and the Systematic Theft of Africa’s Wealth by Tom Burgis, published by William Collins.

  • A man walks past an election billboard at the Watt market roundabout in Calabar, Cross River state, last month. Politicians are in the pockets of crime lords who have established a smuggling empire in Nigeria’s border towns and gateway cities. Pictures: REUTERS/INIOBONG SAMUEL
  • Textile vendors look after their Chinese-made goods inside their stalls in Kano, northern Nigeria, in 2011. They do not bother to hide their illicit wares, the smuggling of which is a lucrative source of bribes for officials. Pictures: REUTERS/JOE PENNEY
  • A view of an illegal oil refinery along the Ekulama creek, outside the oil hub city of Port Harcourt in Nigeria’s Delta region. The underground industry is thought to be worth hundreds of millions of dollars a year. Northern Nigeria’s crime lords can trace their hegemony — and the abandoned textile workers their predicament — to the discovery of oil in the Niger Delta in the south. Oil has corrupted Nigeria, and the more the country’s non-oil economy withered, the greater the impulse to embezzle. Picture: REUTERS/AKINTUNDE AKINLEYE

THE chief of the border post let out another long sigh. “On attend (wait).” The wait had already lasted hours. Not for the first time I was at the mercy of a temperamental fax machine. I was trying to cross the Nigerian border with its northern neighbour, Niger.

Someone in the visa section of Niger’s embassy in Nigeria had neglected to send some document to headquarters to authorise my visa, and faxing it over was proving complicated.

Whiling away the morning in 2010 beside the taciturn border chief offered me an opportunity to observe one of the few effective institutions in this part of the world: the smuggling racket.

Dozens of trucks were queuing to cross from Niger into Nigeria. Their contents seemed harmless enough: many contained textiles and clothing bound for the markets of Kano and Kaduna, northern Nigeria’s two main cities.

Weapons and unwilling human traffic cross Nigeria’s northern border covertly. But the flow of counterfeit Chinese-made textiles has grown so voluminous that it would be impossible to keep it secret, even if secrecy were required to ensure its safe passage. All the same, most of the shipments go through under cover of darkness.

Those who control the trade engage in highly organised “settling”, or bribing, of the border officials, smoothing the textiles’ transit. The Nigerian stretch is the final leg of a 10,000km journey.

It begins in Chinese factories, churning out imitations of the textiles that Nigerians previously produced for themselves, with their signature prime colours and waxiness to the touch.

By the boatload they arrive in West Africa’s ports, chiefly Cotonou, the capital of Benin, a tiny country beside Nigeria whose major economic activity is the trans-shipment of contraband.

The trade is estimated to be worth about $2bn a year, equivalent to about a fifth of all annual recorded imports of textiles, clothing, fabric and yarn into the whole of sub-Saharan Africa.

Smuggling is a long-established profession here. Before colonial cartographers imposed the frontier, today’s smuggling routes were the byways of legitimate commerce. The border marks a delineation of what used to be British and French territory in West Africa, but no natural division of language or ethnicity exists. People on both sides speak Hausa, a tongue in which the word for smuggling, sumoga, strikes a less pejorative note than its English equivalent.

Not being a roll of fake West African fabric, I was not a priority for processing. Eventually the border chief’s phone rang. Off we trundled, past trucks with “Chine” daubed on the side, a brazen reference to their cargo’s origin. Another name went unrecorded, that of the trucks’ proprietor.

Few dare to speak it openly here. But further to the south, where the truckloads of counterfeit textiles have helped to wreak economic destruction, I had heard it whispered a year earlier.

Kaduna is the gateway between the Christian south and the northern half of the country, an expanse that stretches up to the border with Niger and largely follows Allah. The city lies in the turbulent Middle Belt, prone to spasms of communal violence when patronage politics, dressed in the garb of religion or ethnicity, turns bloody.

On a stifling Sunday morning, a friend took me around Kaduna’s central market, a teeming grid of wooden booths. Many of the stalls were selling clothes.

Some bore the misspellings that are counterfeiters’ inadvertent trademark: “Clavin Klein” read one shirt label.

Others carried the equivalent of the appellation d’origine controlee badges that French vineyards and cheese makers append to their produce. “Made in Nigeria,” the labels declared. But they were fake too.

Aike, a young trader from the east, told me he stocked up on bogus labels when he went north to Kano to replenish his supplies of lace. “Mostly everything is made in China,” explained another trader selling jeans.

At Raymond Okwuanyinu’s stall I found rolls and rolls of the coloured fabric that is used for fashioning a popular style of billowing trousers. Here there was no attempt at subterfuge. Mr Okwuanyinu said it was a matter of simple economics.

Nigeria may be the largest source of African energy exports, but it generates only enough electricity to power one toaster for every 44 of its people. Billions of dollars assigned to fix the rundown power stations and the dilapidated grid have been squandered or pilfered.

Even those lucky enough to be connected to a functioning cable face the maddening task of negotiating with what used to be called the National Electric Power Authority or Nepa (but known as Never Expect Power Anytime).

It was rebranded as the Power Holding Company of Nigeria, or PHCN (Please Have Candles Nearby or, simply, Problem Has Changed Name).

Most must make do with spluttering diesel generators. In a country where 62% of people live on less than $1.25 a day, running a generator costs about twice as much as the average Briton pays for electricity. The crippling cost of electricity makes Nigerian textiles expensive to produce.

Mr Okwuanyinu, the Kaduna trader, said he could sell trousers made from Chinese fabric at two-thirds the price of those made from Nigerian fabric and still turn a profit.

Hillary Umunna, a few stalls over, concurred. The government’s attempt to support the Nigerian textile sector by banning imports was futile, Mr Umunna opined, his tailor’s tape-measure draped around his shoulders. “These things now,” he said, gesturing at his wares, “they say it is contraband. They can’t produce it, but they ban it. So we have to smuggle.

“It is a pitiable situation,” said Mr Umunna, apparently oblivious to his and his colleagues’ role in their compatriots’ downfall. “All the (textile factories) we have here have shut down. The workers are now on the streets.”

In the mid-1980s Nigeria had 175 textile mills. Over the quarter-century that followed, all but 25 were shut down. Many of those that have struggled on do so only at a fraction of their capacity. Of the 350,000 people the industry employed in its heyday, making it comfortably Nigeria’s most important manufacturing sector, all but 25,000 have lost their jobs.

Imports comprise 85% of the market, despite the fact that importing textiles is illegal. The World Bank has estimated that textiles smuggled into Nigeria through Benin are worth $2.2bn a year, compared with local Nigerian production that has shrivelled to $40m annually.

A team of experts working for the United Nations concluded in 2009: “The Nigerian textile industry is on the verge of a total collapse.” Given the power crisis, the near-impassable state of Nigeria’s roads and the deluge of counterfeit clothes, it is a wonder that the industry kept going as long as it did.

The knock-on effects of this collapse are hard to quantify but they ripple far into the Nigerian economy, especially in the north. About half of the million farmers who used to grow cotton to supply textile mills no longer do so, although some have switched to other crops. Formal jobs in Nigeria are scarce and precious. Each textile employee supports maybe half a dozen relatives. It is safe to say that the destruction of the Nigerian textile industry has blighted millions of lives.

After I left Kaduna’s market, my friend took me to meet some of those who had felt the industry’s collapse hardest. Sitting around on rickety desks in the half-light of a classroom beside the church where some of Kaduna’s Christians were loudly asking a higher power for succour, nine redundant textile workers poured forth their woes. Shuffling their feet and looking warily around for anyone who might be eavesdropping, the men murmured a single word: “Mangal.”

Alhaji Dahiru Mangal is a businessman, a confidant of presidents, a devout Muslim and a philanthropist whose airline transports Nigerian pilgrims to the annual hajj in Mecca. He also ranks among West Africa’s pre-eminent smugglers.

He got his start as a teenager in the 1980s, following his father into the import-export business, and he swiftly made the cross-border freight routes his own.

“The Chinese attacked at the heart of the industry: the wax-print and African-print segment,” was the explanation from a consultant who has spent years investigating — and trying to reverse — the slow death of Nigerian textiles.

During the 1990s Chinese factories began copying West African designs and opening their own distribution branches in the region. “This is 100% illicit — but the locals do the smuggling,” the consultant went on. There are, he said, 16 factories in China dedicated to churning out textiles with a “Made in Nigeria” badge sewn in.

For a time the Chinese material was of a much lower quality than Nigerian originals, but that gap narrowed as Chinese standards rose. The Chinese began to take control of the market, in league with Nigerian vendors. Mr Mangal acts as the facilitator, the conduit between manufacturer and distributor, managing a shadow economy that includes the border authorities and his political allies.

Around 2005, Olusegun Obasanjo, the former military ruler then embarking on his second term as elected president, decided to do something about smuggling and the damage it was causing to the textile industry.

Mr Obasanjo dispatched Nasir el-Rufai, a northern-born minister with a reputation as a reformer, to try to get Mr Mangal to clean up his act. Mr Rufai told me that Mr Mangal asked him: “Why does Obasanjo call me a smuggler? I just do logistics. I don’t buy any of the goods that are smuggled. I’m just providing a service.”

(I tried unsuccessfully to arrange an interview with Mr Mangal. He did not respond to questions sent to his representative.)

Mr Mangal and the rest of northern Nigeria’s crime lords can trace their hegemony — and the abandoned textile workers their strife — to the discovery of oil in the Niger Delta.

Oil has so corrupted Nigeria that, for those trying to make an honest buck, the outlook is dispiriting. In Nigeria the sale of crude oil and natural gas generates about 70% of government revenue; in newborn South Sudan the figure is 98%.

Taxes, customs receipts and revenue from the sale of state assets — on which industrialised nations rely to fund the state and that require the acquiescence of the population — matter far less than keeping the resource money flowing. Nigeria’s gross domestic product recalculation last year showed that, once taxes from the oil sector were removed, the government relied on the people for just 4% of its income.

The pattern was the same as in Angola or the Democratic Republic of Congo: the more Nigeria’s non-oil economy withered, the greater the impulse to embezzle, perpetuating the cycle of looting.

The deterioration of northern Nigeria’s textile industry created new demand for imported clothes and fabrics, strengthening Mr Mangal’s stranglehold on the market and throttling the indigenous industry’s chances of resuscitation.

For the likes of Boko Haram, the northern Islamist terrorists linked to al-Qaeda who have proved more than a match for the security forces, the corruption of the state and the lack of economic opportunity serve as recruiting sergeants. From its heartland in the remote northeast, its fighters bombed cities and burned villages across the north.

The sheer scale of Mr Mangal’s smuggling operation gave him sway over Nigeria’s northern borderlands, and many of the north’s senior politicians were, I was told, in his pocket. “So many people are benefiting from the (customs) service the way it is and they want to keep it like this,” says Yakubu Dogara, a northern member of Nigeria’s national assembly who had chaired an inquiry into the customs service.

I asked him about Mr Mangal’s role, suggesting he was at the centre of the smuggling operation. “Some of the perpetrators are well known,” Mr Dogara said. “Even the customs know them. But they are not empowered to go after them.”

He paused. “The person you have just mentioned is untouchable, untouchable.”

By funding Umaru Yar’Adua’s successful campaigns for governor of his home state, Katsina, and then for the presidency, Mr Mangal had ensured he had a protector at the top of the rentier class that uses Nigeria’s oil to maintain its hegemony.

Goodluck Jonathan assumed the presidency when Mr Yar’Adua fell fatally ill in 2010, becoming the first son of the Niger Delta to hold the highest office. He knew better than to start picking fights with a smuggler who had proved himself a generous benefactor to the People’s Democratic Party in the past.

Even if the day comes when Mr Mangal’s smuggling empire topples, it would be a monumental task to salvage what remains of northern Nigeria’s textile industry, let alone return it to its former glory. It is the structure of an economy in thrall to oil, more than any one crime lord, that condemned those mill hands to penury. Nigeria has paid quite a price for the dubious honour of being the continent’s biggest oil producer.

 

In : Business

About the author

Nigerian Community,News, Events and more