TRALAC - Trade Law Centre

Botswana: Textiles off to a brisk 2011

Thursday, 07 April 2011

Source: Mmegi (Botswana)

The country's textile sector kicked off 2011 with a measure of recovery, compared to its performance since the recession, with preliminary data indicating exports of P119 million for January.

Last month's exports are the sixth highest in 22 months, a period during which the textile sector nearly collapsed under the weight of the recession, stiff competition from Asian rivals and reduced support from Southern African Customs Union Duty Credit Certificates.

During the period, the sector shed more than 70 percent of the 8, 000 jobs it boasted prior to the recession, prompting government to avail a P38 million rescue package last January, targeted at saving citizen jobs.

Preliminary Central Statistics Office (CSO) data released last Thursday suggest government's bailout lifted the sector's performance, with exports recorded at P118.9 million. Early last month, Trade and Industry Minister, Dorcas Makgato-Malesu revealed that the bailout had benefited 106 companies and 4, 014 citizen workers through grants amounting to P13 million, across the country.

However, analysts believe that January exports, while positive, belie the fact that the industry is far from recovery.

Exports for 2010, according to the CSO, amounted to P1.1 billion, a far cry from the P1.4 billion recorded in the recession year 2009. The local industry hit a peak in 2007 with exports reaching P2.2 billion, followed by P1.9 billion in 2008; the year in which the global financial crisis began, triggering the recession.

Although officials from the Botswana Exporters and Manufacturers Association (BEMA) were unavailable at Press time yesterday, all indications are that the textile sector will not return to its boom years. The African Growth and Opportunity Act (AGOA) under which local textile firms received favourable export conditions to the United States is set to expire in four years, robbing the local industry of a lucrative market.

AGOA resulted in the blossoming of the local textile sector, particularly after 2006 when the US allowed Botswana and Namibia to export textiles from fabric manufactured anywhere in the world. Prior to this special rule, local textiles would have had to be from fabric manufactured internally.

Observers believe government's two-years will thus provide short-term relief for a sector that will eventually have to re-strategise once lucrative US market becomes inaccessible. CSO data indicates that prior to 2009, the textile industry, including preparation of textile fibres, synthetic material, clothing and other wearing apparel, was among the fastest-growing sectors of employment creation in the economy.

Employment in the sector, which stood at 8,019 by June 2008, slumped to 2,108 by March 2009, a 73 percent drop. By September, the figures had improved to 2,485, as markets gradually recovered, while locally, government's support of the economy rubbed off the textile sector.

Of the total workers employed by September 2009, 92 were citizens, influencing government decision to support the sector through January 2010's rescue package. The textile sector is a generator of low-skill, youth-oriented jobs, providing employment avenues for thousands of out-of-school youths, particularly women.



“ 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.