TRALAC - Trade Law Centre

Botswana: Trade minister urges textile firms to exploit AGOA provision

Saturday, 25 August 2012

Source: Mmegi (Botswana)

The Minister of Trade and Industry Dorcus Makgato-Malesu has urged local textile companies to take advantage of the recent extension of provisions of the African Growth Opportunity Act (AGOA).

Currently one local company, Caparrel Botswana, exports to the United States of America (USA) under the AGOA provision.Other textile companies mostly sell their produce to South Africa and Asian nations. In the past, some companies grumbled that the government does not help them to export to the USA under the AGOA provision.

The companies complained that without a government subsidy, it was not cheaper to sell their products through AGOA than to other markets. The companies also lamented that the cost of operating in Botswana was high, a factor they said gave their competitors in other countries a competitive edge when selling their products through AGOA.

For this reason, they preferred markets close by where the cost of exporting was cheaper.However, Malesu told Business Week recently that government has done enough to support local companies to benefit from the AGOA market.

She further urged local firms to improve the way they do businesses to enjoy gains from the AGOA initiative, which has benefitted many textile firms in the African region."The government just plays a facilitative role for local textile companies that want to sell their textile produce through the AGOA initiative.

The government has availed enough information on how companies can benefit from AGOA. What is left for textile companies is that they should begin producing quality goods and improve their competitiveness to position themselves to effectively benefit from the lucrative AGOA market like other firms around the region," she said.

The minister also said government was currently considering to renew the textile stimulus package for the textile industry.The two-year stimulus package expired last December, and since then, local textile companies have been going through a rough patch, facing an uncertain future.

Some firms have even threatened to retrench staff.Other firms, like B&M Garments in Tonota and Nortex Textile in Francistown said they had to cut down lucrative orders from neighbouring countries and ditch their expansion plans.

The subsidy was meant to help companies remain in business during the economic meltdown."The issue has been brought to my attention (the need to renew the textile subsidy) by companies and I have requested officials from my ministry to do an analysis on the ground. The analysis will determine if it will be viable to bring back the textile subsidy or not," she said without specifying when her officers will have concluded their work.

 

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