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Nigerian market opens up for clothing retailers

Nigeria’s decision to lift a ban on imported textiles is opening up many opportunities for foreign clothing retailers.

Mr Price is eyeing opportunities in Nigeria.

Mr Price is eyeing opportunities in Nigeria.

Nigeria originally imposed the ban in 2003 to stimulate domestic production. This, however, only led to the smuggling of cheap clothing from Asia. Local manufacturers have also struggled because the country’s poor power supply forces them to run their operations on expensive generators.

The Nigerian government last year announced that it will lift the ban and introduce import tariffs. These tariffs were originally reported to be between 10% and 20%, but according to some sources the effective rate is much higher.

An industry source told How we made it in Africa that the ban has been scrapped and that clothing products can now legally enter the country.

“The recent lifting of the textile importation ban in Nigeria has sharply expanded the scope of international retailers that are able to trade in Nigeria,” says Michael Chu’di Ejekam, director of Actis West Africa’s real estate division. Actis developed Nigeria’s first modern shopping mall, The Palms in Lagos, and its second facility, the Ikeja City Mall, is set for completion in 2012. Ejekam expects the lifting of the ban to increase the demand for retail space in Nigeria.

Nigeria has a number of new modern shopping malls in various stages of development. These include the Ikeja City Mall in Lagos, the Polo Park Mall in Enugu State and a planned shopping centre in Ilorin, Kwara State. Current facilities include The Palms in Lagos, the Tinapa Shopping Centre in Cross River State and the Ceddi Plaza in Abuja, to name a few.

“There is a lot of property development going on in [Nigeria] . . . and most of these new developments include a retail component,” says Dianna Games, executive director at consultancy [email protected] “The large growth of the middle class is the driving force behind this new way of shopping,” she says.

South African clothing retailer Mr Price has indicated that it is interested in opening up stores in Nigeria. The company already has operatons in other African countries but sees Nigeria as the first prize. Business Day last year quoted Mr Price chairman Alistair McArthur saying that “the big one we need to open up is Nigeria”. He added that Nigeria’s population of more than 154 million could support 50 to 100 stores.

According to a Bloomberg report, another South African food and clothing retailer, Woolworths Holdings, is also considering opportunities in Nigeria. In addition, European women fashion group Etam’s outlet in Lagos is set to open soon.

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