- African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/Building Africa’s manufacturing strength in the textile and clothing sector

Building Africa’s manufacturing strength in the textile and clothing sector

Building Africa’s manufacturing strength in the textile and clothing sector
Credit: Aurélien Gillier
Published date:
Thursday, 31 January 2019
Emanuela Gregorio

The rise of the fast fashion industry in the past few years has brought in its wake a booming trade of second-hand clothing.

Today, millions of people around the world donate clothes with the understanding that they will support the needy or will be resold in secondhand stores.

But are increased imports into Africa of second-hand clothing from developed countries consistent with the contemporary agenda of African economies, which is to industrialize and add value, rather than to consume?

This is at the heart of the recent trade dispute between African economies, particularly those in the east,  and major international exporters of second-hand clothing, such as the United States.

Today, about 62% of the continent’s total exports are in primary form. With exports being largely commodity-driven, Africa is in a risky position because of price volatility and because it is dependent. Building a competitive textile value chain is an import step for the African continent to revive its import substitution industries. So the agenda to industrialize is a priority, but can the continent turn its production of textiles and clothing into a manufacturing industry when second hand exports dominate the consumer market?


What is it about second-hand clothing in Africa?

Used clothing has diverse names in the various African countries. In Rwanda, it's chagua, in Kenya, mitumba, and  salaula in Zambia.

The global trade of second-hand clothing has a long and rugged history. It became prominent due to its affordability and to the surge in liberalization policies in the early 1990s. Second-hand clothing provides work for millions of resellers, distributors and market stall holders in developing markets, particularly in East Africa. But the decision by some countries to cut its imports of second-hand clothing in order to encourage local textile manufacturing has brought forth charges of protectionism from developed country exporters.

In an attempt to reconstruct the domestic garment industry, countries such as Rwanda are putting in place an industrial strategy to develop local textiles, apparel and leather sectors, taking a determined stance on imported second-hand clothing, which resulted in the US suspension of AGOA duty-free access to US markets. The exclusion from AGOA would affect about 3% of Rwanda's total exports to the US, that amounted to $1.5 million in 2017. Rwanda’s total exports that year amounted to $43.7 million .

However, the effects of the AGOA suspension on local economies may be mixed. It may stimulate local production of new clothing and footwear for the domestic market, but it could also negatively affect consumers through higher prices and reduced availability of clothing.

The garment and clothing industry globally are expected to double in the next 10 years, generating up to $5 trillion annually. In the USA alone, $284 billion are spent every year on fashion retail through the purchase of 19 billion garments.

This presents a tremendous opportunity for Africa at various levels of the value chain. From design to production to marketing, the fashion industry is a big and profitable business. The combined apparel and footwear market in sub-Saharan Africa is estimated to be worth $31 billion.


Creating a competitive value chain

The textile and garment industry presents a unique opportunity for countries seeking to pursue industrialization. The sector helps to diversify the economy, and if geared towards exports, it can be a source of foreign exchange.

Let’s look at the case of Ethiopia. The country has a target to generate $30 billion in exports from the textile and apparel sector by 2030 and the government has been building industrial parks to enhance the textile investment and productivity of the country. It’s no wonder that Ethiopia has attracted textile manufacturing giants like H&M and Primark.

But African countries face a host of challenges and opportunities alike. These include a weak business environment; a scarcity of skilled and unskilled workers, high cost of production, and low-level infrastructure among other challenges.  

There is an urgent need for Africa to rapidly industrialize and add value to everything that it produces, and the textile and clothing industry is dominated by small and medium size enterprises, which have the potential to create decent jobs - skilled and unskilled - for millions of Africans, especially women and youth.

African countries need to build adequate infrastructure. Information and Communications Technologies (ICTs) such as e-commerce will be key to support this growth and tap into global and regional value chains.

Opportunities for African countries to take advantage of the potential of the textile and garment industry and participate in global or regional value chains depend on the comparative advantage of each economy, the level of its regional/global integration, infrastructure, human capital, access to finance and policies.

The African Development Bank has launched the Fashionomics Africa Flagship initiative to support the development of small and medium-scale enterprises operating in the textile and clothing industry in Africa, with a focus on women and youth empowerment, by increasing access to finance and access to markets through e-commerce  for entrepreneurs whilst incubating and accelerating start-ups. 

Success will come in ensuring that local content and artisanry are used and properly credited in the value chain which includes industrialization. This creates the foundation for a more sustainable and faster structural transformation of African economies. 

Emanuela Gregorio, Economist, Gender, Women and Civil Society Department, and Stephen Yeboah, Communications Expert, both at the African Development Bank.


Read related news articles

AGOA boosts Kenya's textile exports to US, sector sees 7.2% growth

The African Growth and Opportunity Act (AGOA) has benefitted Kenya’s textile and apparel sector, leading to monthly exports to the tune of Sh4.5 billion, or Sh150 million per day, last year, according to a study by London-based Institute of Economic Affairs (IEA). The programme has had a positive impact on the country’s export-processing zones (EPZs), especially in the textile and garment sector. Kenya is the second-largest exporter of...

08 August 2023

US fashion brands urge early renewal of AGOA

US fashion companies are calling for the early renewal of the African Growth and Opportunity Act (AGOA), a trade program that allows thousands of African products to enter the United States duty-free. They argue that a longer-term arrangement would not only benefit African economies but also boost investment in the region. The AGOA was first enacted in 2000 and is currently set to expire in 2025. However, US officials have indicated that the...

31 July 2023

US boosts Kenya apparel industry with $55m in new trade deals

The US is giving Kenya $55 million for expansion of export processing zones in a move that will boost Nairobi’s apparel exports. US initiative Prosper Africa and the US Embassy announced the funding at the launch of the US-Kenya Business Roadshow held on April 25 in New York. The announcement was part of the commitments made by President Joe Biden at the US-Africa Leaders’ Summit last year. The funds will be channelled under USAid and...

29 April 2023

Nigeria: Garment factory to create 2,000 direct jobs, utilize AGOA

Kwara State Governor, AbdulRahman AbdulRazaq, at the weekend, said the state’s garment factory will be inaugurated this year with a take off capacity to hire 2,000 direct labour. Speaking with dozens of APC youths, progressive social media influencers, and some online news publishers on Saturday, the governor said the idea is to make Kwara a hub for garment production, which can then benefit from the African Growth and Opportunity Act...

26 August 2022

AAFA: Africa ‘logical’ choice for brands fleeing China

The American Apparel and Footwear Association (AAFA) urged the office of the United States Trade Representative (USTR) to renew the African Growth and Opportunity Act (AGOA), as U.S. brands and retailers look to diversify sourcing. While the trade agreement’s expiration is still three years away, the Washington, D.C.-based trade group believes that establishing long-term, forward-looking policy will help brands commit to new sourcing...

29 June 2022

Kenyan textile company eyes export market through new Zanzibar facility

A Kenyan company is setting up a $51.3 million (about Sh115 billion) factory in Zanzibar as it targets to get a pie of the world’s $920 billion textile market. The global textile industry was estimated at around $920 billion in 2018, and it was projected to reach approximately $1,230 billion by 2024, available global data show. With its $51.3 million factory at Chunguni area in Zanzibar, Basra Textiles Limited is specifically targeting...

12 January 2022

Ethiopia’s economy hit as major clothing maker closes shop

Ethiopia’s once rapidly growing economy is taking another hit tied to its yearlong war, with global clothing manufacturer PVH Corp. saying it is closing its facility there because of the “speed and volatility of the escalating situation.” PVH, whose brands include Calvin Klein and Tommy Hilfiger, has been a marquee occupant of Ethiopia’s model industrial park in the city of Hawassa, where Africa’s second-most populous country has...

19 November 2021

Togo's textile focused SEZ aims to create value-added textile supply chain

Togo’s ‘PIA’, a textile focussed SEZ, aims to create an eco-system for textile value chains and offer multiple incentives to foreign investors investing in the Textile Park.  A West African nation ‘Togo’ recently established the Adétikopé Industrial Platform (PIA), a Special Economic Zone (SEZ) conceptualised by ARISE IIP, to unlock the growth potential and promote the industrialisation of Togo. Located along the strategic...

05 October 2021

'Changing jeans sourcing scene has these countries coming up roses'

The sourcing landscape for denim jeans is slowly but certainly shifting, while overall U.S. blue denim apparel imports continue to decline. Imports of jeans fell 7.43 percent in the first two months of the year compared to the same period in 2020 to a value of $460.25 million, expanding on a 5.36 percent year-over-year falloff in January, according to the Commerce Department’s Office of Textiles & Apparel (OTEXA). Coming off...

09 April 2021

Lesotho: '45,000 textile jobs at severe risk'

With only about a week left, the United States government says it is "disheartened" by Lesotho's failure to address its human trafficking concerns. This puts the country on the brink, with the real risk of losing billions of maloti in funding under the second compact and about 45 000 textiles jobs facing serious jeopardy. The US had given Prime Minister Moeketsi Majoro's government a 1 February 2021 deadline to address an array of human...

28 January 2021

Ghana Apparel Training Centre launched to develop garment industry

In efforts to support Ghana’s garment manufacturing industry, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, together with its partners – Ethical Apparel Africa (EAA), Gerber, Groz Beckert, Freudenberg and Accra Technical Training College (ATTC), have officially launched the Ghana Apparel Training & Service Centre, in Accra. The launch forms part of a public-private partnership between the German Federal...

27 November 2020

You are here: Home/News/Article/Building Africa’s manufacturing strength in the textile and clothing sector