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Malawi: Garment Makers Lobby for AGOA Policy Change

Published date:
Tuesday, 21 November 2006

Several countries including Malawi are lobbying for a change of the African Growth Opportunity Act (Agoa) trade agreement, a leading player in the garment sector said Monday.

The Act states that from March 2008 all Agoa beneficiaries would be required to produce textile from locally grown raw materials for export to the initiators, United States of America, duty free. But local producers use imported fabric and other raw materials to produce their garments.

Chairman of the Garments and Textile Manufacturers Association of Malawi (GTMA), Kantila Desai admitted high production capacity of emerging world economic giants China and India posed a major challenge to Malawi and other Southern African garment manufacturers benefiting from Agoa.

“Even South Africa, the region biggest economy in the region, cannot match China and India. So we are trying to establish our capacity base and lobby the US government to soften the stand on the policy for us to continue export to them,” said Desai, who is also chairman for Knitwear Industries Limited

Desai said Malawi has no choice but to lobby the US government because it lacks capacity to stand on its own in the garment manufacturing.

A boom in textile manufacturing in neighboring Mozambique and Zambia who are very capable of producing most of their raw materials is another challenge to Malawi, Desai said.

He bemoaned that Malawi failed to take full advantage of Agoa because there were no deliberate policies on the ground to attract more investors in the sector.

He cited that in the past 15 years, ether had been no prescribed incentives to manufacturing industries like tax holidays.

Agoa has allowed African countries to export goods worth $448 million to the US market since it was approved in the year 2000. It has 150,000 jobs with skills imparted to the textile industry in several countries.

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