What is today known as Multi Fiber Agreement under World Trade Organization (WTO) had its root from General Agreement on Tariffs and Trade (GATT) as the only multilateral instrument governing international trade on textile and clothing. Multi Fiber Agreement was established in 1974 as a short term measure to allow developed countries to adjust to imports from developing world. It is an international agreement under which two countries may negotiate quota restrictions on textile and apparel imports from each other. The Multi Fiber Agreement was therefore set up as a set of formal quota agreements and restrictions governing textiles and clothing trade between developing countries and developed world. The expiration of Multi Fiber Agreement (MFA) in 2005 heralded tremendous opportunities and uncertainties for the textile industries in both developed and developing countries.

Naumann (2006) has argued, no other sector has seen such a rigid institutionalisation of quantitative restrictions, which in turn have had very wide reaching intended and unintended consequences on textile industries in Nigeria. In fact, quotas in this sector have been the common denominator that have shaped the development path of the textile industries and have been the single most important factor contributing to its worldwide diffusion in recent decades.

With the WTO Agreement on Textiles and Clothing providing a scheduled removal of MFA quotas over the decade 1995 – 2005, global changes relating to quota phase-out took place during the early stages of the Agreement. It is against this backdrop that this study examined the effects of the expiration of the MFA on Nichemtex Nigeria Limited, Ikorodu, Lagos.

However, it is important to note that from 1974 onwards, world trade in textiles and clothing has been governed by the Multi-Fibre Arrangement (MFA) under which many industrial.