TEXTILE SECTOR AND ECONOMIC DEVELOPMENT IN NIGERIA

Abstract

This study examines the impact of the textile sector on Nigeria’s economic development, as measured by GDP per capita income growth, from 1990 to 2024. Motivated by the sector’s historical significance and prolonged decline in the middle of inconsistent policy outcomes, this study addresses the empirical ambiguity surrounding its contribution to per capita income. Using an ex-post facto design and secondary time-series data, the study employs the ARDL bounds testing approach to analyze the long- and short-run relationships between GDP per capita growth and three key textile sector indicators: output growth, employment level, and export earnings growth. The findings reveal a significant positive long-run relationship between textile output growth and GDP per capita growth, with a strong coefficient of 15.097, confirming the sector’s potential as a potent driver of economic development. However, the results also indicate significant negative long-run relationships between textile employment and export earnings growth, highlighting the paradox of jobless growth and poor export competitiveness. A significant error correction term of -0.617 confirms a stable long-run equilibrium and a rapid adjustment mechanism. The study concludes that while textile output growth remains crucial for development, realizing its full potential requires targeted policies to address structural inefficiencies in employment generation and export value addition. Recommendations include intensified investment in infrastructure and finance for production, strategies for labor-intensive formalization, vertical integration for exports, and leveraging regional trade agreements, such as the AfCFTA.