TRALAC - Trade Law Centre

"Exploit AGOA" Says Textile Entrepreneur

Wednesday, 17 November 2004

Source: Mmegi/The Reporter (Gaborone)

A Botswana textile entrepreneur said yesterday that the country should not worry about who won the US elections but what it has achieved under Africa Growth and Opportunity Act (AGOA).

Aswin Singh, the chief executive officer for the Microlith Factory in Selibe Phikwe said yesterday that Botswana should fully take advantage of the extension of AGOA.

"AGOA is in place, the elections have come and gone and Botswana should take advantage of the extension," Singh said. He added that the Botswana elections are more important than those of the US. Botswana textile entrepreneurs have anticipated that George Bush's re-election as US President would accord them more chances to penetrate the American market under AGOA.

But Singh said that Botswana needs to address current issues and define how the government would help the textile industry. He lamented that entrepreneurs in the country are still crying about the same old problems like high costs and the fact that Botswana is landlocked.

In the previous interviews, he decried lack of incentives from government and financial institutions since there is no cash to support local companies.

He added that the working capital is too high and the importation of raw materials that include garments and fabrics is expensive.

"The Botswana economy needs more employment and we are not interested in the past," he said.

Singh said the blame should be on government which has done nothing for the country's entrepreneurs to claim a substantial textile market share.

"We have achieved little. Our costs are too high and government needs to look at costs. Nothing has happened; the labour, government and the industry need to strike alliances that could achieve something," Singh said.

He proposed that the government should approach individual companies or groups to help them compete with other countries in the AGOA league like Lesotho, Namibia and Mauritius.

The situation is made worse by the fact that Botswana is far from seaports as compared to other beneficiaries of AGOA. This puts local textile companies at a disadvantage", he said.

Other problems facing the industry are the unskilled labour force, lack of assistance from government in manpower training and the exchange rate of the Pula and Rand against the Dollar. When the two super African currencies gain strength they put the export potential in danger, he explained.

Singh said the textile sector is currently not doing and added that new and potential investors are going somewhere else.

"The performance is very poor and there is no reason for new industries to come here. They would rather go to Lesotho or South Africa. Costs are very high and there are no incentives for people to come here. It is landlocked and the population is small," Singh said.

Singh's Microlith is one of the local textile companies that export and benefit from AGOA. Others include Caratex, Dinesh Textiles, Uni Oriental and BNM Garments.

Most of these companies are based at the textile hub of Selebi-Phikwe, which is expected to face an economic downturn when the lifespan of the copper mine comes to an end in the next few years.

Microlith Factory was established in 2000 and currently employs 500 workers. It is one of the five garment factories in Selebi-Phikwe that have been exporting products to South Africa and Europe before AGOA. AGOA is a trade pact that offers duty-free access for some goods into USA and other trade benefits to the poorer countries of sub-Saharan Africa that include Botswana. Other countries that benefit from the trade pact in Southern African Customs Union are Lesotho, Namibia, South Africa and Swaziland.

The second phase of AGOA was extended in mid 2004 by the US senate to 2015.

AGOA 2 was to expire in September this year.



“AGOA Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Botswana’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.