TRALAC - Trade Law Centre

South African Firm to Tailor Clothing Sector Growth

Friday, 12 September 2003

Source: Business Report

Cape Town - Independent trust ComMark, which is sponsored by the department for international development in the UK, launched an initiative earlier this week to help spur growth in the clothing industry in southern Africa.

ComMark, which has £15 million in funding available for a five year implementation cycle, aims to help developing countries in the region.

Executive director Paul Zille said the trust wanted to ensure these countries took advantage of the large employment growth opportunities that the clothing industry offered.

In its work, ComMark focused on a limited number of high-growth subsectors with the potential for significant effect on the economically active poor.

"We have prioritised the clothing [garments] sector across Southern African Customs Union (Sacu) countries," Zille added.

ComMark's development goals include the reduction of poverty in Sacu countries.

South Africa's clothing industry is currently in a cyclical downturn driven by the strength of the rand following four years of solid growth during which exports rose at a compound rate of more than 35 percent a year.

Exports from the local clothing sector to the US have grown by 151 percent in the past two years but are currently down, and imports up, due to the rand's appreciation and the cyclical downturn in the sector.

The textile industry is also taking strain due to the effect of the strong rand as well as the scourge of illegal textile imports.

Andy Salmon, the regional textile and apparel specialist at ComMark, said there was enormous growth in the clothing industry in the Sacu region.

Lesotho, in particular, had experienced extraordinary growth.

"This offers major opportunities for further growth in regional service initiatives."

With the likely loss of the special preferential status that the least developed countries in the region enjoyed under the US's African Growth and Opportunity Act (Agoa), these kind of regional service initiatives would be key.

Least developed countries that have special preferential status are allowed to export duty free to the US using imported fabrics. However, this could change. Talks are under way between South Africa and the US over a proposed free trade agreement between the US and Sacu.

"The countries in the region must start to co-operate to solve the massive shortfalls in Agoa qualifying fabrics," Salmon said.

With the global lowering of tariff barriers, the crux to sustaining the industry was to build global competitiveness.