TRALAC - Trade Law Centre

Botswana: Key study could rescue ailing textile sector

Saturday, 05 May 2012

Source: Mmegi Online (Botswana)

The USAID Southern Africa Trade Hub and government are set to kick-off a sector-wide study into the country's ailing textile and apparel industry, as more figures emerge confirming the downtrend in local textile exports.

For the past two years, the textile and apparel sector has been supported by a P38 million government bailout that expired in December.

The sector has been teetering again, in the aftermath of the bailout's expiry, with the sole exporter of garments to the US, announcing it would shed 500 jobs or a third of its workforce this month.

While the bailout provided breathing space from the recession, its expiry meant the return of systemic challenges that have haunted the sector for years, including operational inefficiencies and lack of competitiveness.

The study comes as Statistics Botswana figures released this week suggested an indifferent start to textile exports this year, with a six percent drop to P128 million between January and February. Yesterday, Trade Hub officials said the study, due to begin later this month, could be used to entice regional and international apparel retailers to consider buying garments made in Botswana.

"The study will also be used to attract textile and garment investors to set-up manufacturing enterprises in Botswana," said the hub's AGOA trade specialist, Cosmas Mamhunze. "The consultant engaged will interview a number of Botswana stakeholders in the textile and apparel manufacturing industry.

"The consultant will develop a snapshot profile of Botswana's existing textile and apparel manufacturing industry and will also be expected to comment upon the sector's existing strengths and weaknesses." The consultant to be engaged for the study will attempt to visit and speak to principals at the country's major textile and apparel manufacturing plants. In addition, the consultant will also meet with government department and parastatal staff from relevant organisations.

Formally announcing the study recently, US ambassador, Michelle Gavin said the initiative was expected to demonstrate the country's "considerable potential" for additional apparel investments. "The study will help identify opportunities for increased regional apparel sales and strategies for attracting international investors to Botswana's apparel industry," said Gavin at the National AGOA Forum.

"The study is likely to demonstrate Botswana's considerable potential for additional apparel manufacturing investments.

Should Botswana obtain these investments, textile manufacturing - in addition to apparel - will surely follow." The study is expected to answer key questions around the disparity between Botswana's underperforming textile sector and its blossoming counterpart in Lesotho. The mountainous kingdom's textile and garment exports to the US average US$260 million per year, compared to Botswana's total of US$15.5 million (P115 million) in 2011.

"We have to look at why this is not happening here," said US embassy economic officer, Aaron Karnell at the National AGOA Forum. "Once the direction becomes clear through that study, a mentoring strategy can be developed."Ambassador Gavin said besides AGOA, the local industry could also look at exploiting viable retail markets closer to home, as is being done by Lesotho.

"Consider this statistic; Garment factories in Lesotho supply 15 percent of all of the apparel sold by Woolworths' stores in South Africa," she said. "Lesotho's clothing factories also supply a significant portion of the apparel sold by other South African retail outlets."





“ 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.