[Source Africa] African trade and market growth in textiles and apparel

© Udom Jinama – 123RF.com

Moderated by Clay E. Hickson, Vice President, Strategy and Business Development, Worldwide Responsible Accredited Production (WRAP), USA; panellists included Nancy Whitney, Deputy Office Director, USAID/Southern Africa Regional Economic Growth Office; Finn Holm-Olsen, Director, Trade Promotion & AGOA, USAID Contractor, East Africa Trade and Investment Hub, Kenya; Tim Armstrong, Investment Promotion Director, Textile Development Unit, The Ministry of Industry and Trade, Tanzania; Geerish Bucktowonsing, Divisional Manager Textiles, Enterprise Mauritius; and Shakeel Meer, Divisional Executive: Chemicals and Textiles, Industrial Development Corporation (IDC), South Africa.

The panel provided insight into trends and market growth under AGOA, the challenges presented to the African market, opportunities to maximise the renewal period, and, notably, the critical efforts of strengthening African trade and the economy beyond AGOA.

Sustainable development and social and environmental compliance were identified as the key factors transforming not only the textile and apparel sector, but also a range of industries throughout the globe. It is for this reason that Worldwide Responsible Accredited Production (WRAP) and other compliance certifications are seen as a stamp of approval for buyers and investors. It was stated that audits alone will not bring compliance, and that these social and environmental matters require collaboration in order to achieve continuous improvement across the value chain.

The 10-year AGOA renewal has resulted in increased confidence within the business community, particularly in terms of investor interest and companies sourcing from Africa. Large companies, such as the likes of Vanity Fair and PVH who traditionally buy worldwide, are now setting up in countries like Kenya and Ethiopia.

In focus: Tanzania

Tim Armstrong, who presented a strong case for Tanzania, highlighted the fact that the biggest cost to the Textile and Apparel Industry is delay, placing due importance on speed to market. Tanzania has, to date, led growth under the AGOA agreement ($29m dollars in trade as well as 71% growth). The cotton-rich country is leading the way in terms of sustainability, catering strongly to the increased desire for ecological transparency throughout the supply chain. The region’s minimal use of pesticides has resulted in growing interest from the likes of the Better Cotton Initiative and Cotton Made in Africa.

In focus: Mauritius

Geerish Bucktowonsing of Enterprise Mauritius expressed pride in Mauritius’ sustainable edge and leading position in terms of exports to the USA, despite it being a small country. He attributes much of the region’s growth to their flexibility in terms of orders, quality of product, and absolute adherence to industry norms and standards. He also attributes much of the nation’s success to the tenacity, passion and commitment of the entrepreneur to adapt to changes in the market.

Challenges

A number of poignant questions were posed around the African market’s approach to AGOA. Is Africa ready to leverage on the opportunities presented by AGOA? Many of Africa’s challenges are infrastructural, strained further by the lack of qualified workers in the region. During the seminar Q&A session, a member of the audience aptly noted that, “Productivity is the key to unlocking Africa.”

A key challenge addressed was the Trans-Pacific Partnership (TPP). In addition to challenges such as infrastructure and productivity, this trade agreement presents countries such as Vietnam and Malaysia as direct competitors to African countries. Shakeel Meer stated that while TPP is a reality, it is no reason for panic. He, and the rest of the panel, urges African countries to treat TPP as an opportunity for growth, and to boost the continent’s competitive advantage in the Textile and Apparel sector.

Beyond AGOA

Perhaps the most notable point of all was around envisioning the African Textile and Apparel sector beyond 2025. As Nancy Whitney noted, AGOA was initially intended as a springboard for African growth and development into the global economy.

It is essential for Africa to maximise the opportunities presented by AGOA, and more importantly, to develop the local market. This could involve addressing restrictions between African countries to support inter-regional trade, and removing barriers such as customs and trade barriers.

Business resources to inform strategies for maximising the AGOA agreement include AGOA.info, www.usitc.gov and eatradehub.org.