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The
Tragedy of African Textile Industries
IDEA
Editorial
February 14, 2005
In anticipation of the decline of textile
industries in sub-Saharan Africa (SSA), IDEA
presented in many of its editorials and articles
Africa’s place in the global economy (see for
instance www.africanidea.org/critical.html).
In this editorial, the Institute of Development
and Education for Africa (IDEA), Inc. likes to
delve into the ever-crumbling African garment and
apparel industries.
One obvious major hurdle for African
development that we have discussed here in IDEA
and other forums is the lack of appreciable
skilled manpower, lack of adequate technological
know-how, and sheer small size of African
industries, including textile. This combined
problematic is compounded by Africa’s inability
to compete in the global economy and for this
apparent reason, this editorial will highlight the
problems surrounding textile industries, but with
a caveat to the reader that this problem should be
examined in light of the overall economic
challenges Africa encounters.
The Nigerian textile industries are in the
process of shrinking as a whole or shutting down
entire plants for good. The main culprit behind
the Nigerian debacle is the Chinese invasion of
Nigerian markets. Chinese fabrics in the Nigerian
markets are readily and cheaply available for the
Nigerian consumer and the latter is compelled to
buy Chinese rather than Nigerian textile products.
Because China is endowed with massive intensive
labor potential and relatively skilled manpower in
its respective industries, Chinese products
including textile fabrics are now ubiquitous in
African markets. Nigerian fabrics are more costly
to the Nigerian than the Chinese fabrics, and no
amount of national fervor can salvage the Nigerian
textile factories from their present crisis. In
fact, in excess of one hundred textile factories
are closing down in Nigeria.
Similar to the Nigerian problem is also
encountered by Lesotho, Swaziland, South Africa,
Mauritius, Madagascar, and Kenya. Apparently, the
African Growth and Opportunity Act (AGOA) had
benefited African countries in terms of exporting
their products to the United States and also
enjoyed the quota policy that had been in place to
prevent China and India from entering the market.
But the Chinese cleverly manipulated the quota
hurdle and prudently invested in African textile
industries to indirectly exploit the AGOA package.
Now, thanks to the World Trade Organization
(WTO) Agreement on Textile and Clothing (ATC), the
quotas are lifted effective January 1. 2005. The
lifting of quotas, especially to Chinese and
Indian products will enable the two Asian giants
to venture in unrestricted markets and render
African textile industries incompetent. Countries
like Lesotho and Swaziland may still enjoy
duty-free access to U.S. markets based on AGOA,
but they could face the challenge of costly long
distance transportation and delivery of their
produce to their customers.
As deputy secretary of Lesotho Clothing and
Allied Workers Union, B. Shaw Lebakae, aptly puts
it, “given the end of quotas and the WTO
allowing China and India back into the market, we
believe most of the foreign owned textile
companies in Lesotho will relocate back to their
original countries. They were in Lesotho to
utilize AGOA and those of ATC quota
restrictions.”
The experience of Lesotho is shared by many
SSA countries, whose industrial base is weak due
to heavy dependence on commodities and lack of
diversified economies. In fact, the current trend
of liquidation and closure of textile industries
is, in part, precipitated by Africa’s inability
to compete in the global economy, although the
exogenous factors such as ATC do contribute to the
rapid decline of the already debilitating African
economies. What we are witnessing at present is a
nascent triangular economic relationship of
traditionally marginalized African economy,
emerging Asian robust economy, and a United
States/European Union strong and dominant economy.
African
Marginalized Economies
Asian Robust EconomiesŃUS/EU
Strong Economies
Adding insult to injury, Africa’s textile
production, despite preferential market access to
U S and EU, will continue to decline due to
several factors, including lower workforce skill,
limited availability, high cost, and less
attractive fabrics to the fashion industry. On top
of these problems that continue to undermine the
African apparel and garment industry, one major
disadvantage is the long distance transportation
mentioned above.
We suggest that SSA should overcome their
‘distance’ disadvantage through what we label
Relay Economic Cooperation, by which African
nations can facilitate the smooth operation,
expedient, and less costly transportation by
horizontally integrated African economies that
will, in turn, enhance regional and/or continental
integration. Once African countries are integrated
horizontally, they can have a vertical
relationship with EU, US, China, and Japan etc and
gradually integrate into the global economy.
We in IDEA have argued that the true
salvage of African economies could be realized
only through cooperation and integration. Many
African scholars and statesmen have advocated
African unity in the past and many continue to
echo those ideals in the present. With respect to
the African integration ideal, Trevor A. Manuel,
South Africa’s Minister of Finance, is one
contemporary harbinger. In his December 2004
speech engagement entitled “Africa’s Economic
Renaissance, Development, and Interdependence,”
Manuel had the following to say: “I have
suggested that the development of domestic markets
is needed in African economies. But it is also
true that our economies are small. For that
reason, regional and continental integration of
markets is critical to market development, growth
in nascent industries, and for diversification.
Without serious advances in trade integration,
Africa’s economies will remain at the mercy of
destabilizing terms of trade shocks and other
asymmetric shocks that set development itself back
by decades.”
Regional integration is, of course, not
novice in Africa. The South African Development
Conference (SADC) and the Economic Cooperation of
West African States (ECOWAS) have been in
existence for at least two and half decades, and
now we have the New Economic Partnership for
African Development (NEPAD), whose primary agenda
is to integrate the African economic communities.
“Regional economic integration, as the G20
recently noted,” says Manuel, can be an
important means of achieving greater gains from
trade. In Africa, pursuing that integration
through Regional Economic communities is a
necessity. Such communities will enable us to
create and share markets of significant size,
standardize our regulation of them and create
business certainty and confidence, thereby
facilitating investment and spurring industrial
and service sector diversification. In sharp
distinction from our colonial legacy,
infrastructure planning and rollout can then
follow and facilitate market development.”
Despite the regional organizations,
however, Africa is not integrated yet in the
strict sense of the term, and in some areas, quite
to the contrary, African regions are destabilized
and fragmented. For instance, the Horn of
Africa’s Inter-Governmental Agency for
Development (IGAD) is totally undermined by the
incessant wars and the regional organization has
no actual or symbolic value.
Relative to the overall economic status
discussed above, and going back to textile
industries, South Africa and Mauritius, whose
value-added products and fashionable apparel could
continue to exhibit attraction in the world
market. The rest of SSA textile factories have a
bleak future and we may altogether witness the
total collapse of these industries and aspects of
the economy that hinge upon them. But even the
Mauritius and South African textile don’t have
long-term guarantees unless they serve as fulcrum
to regional and continental integrated economies.
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