Country: South Africa

A grant of US $ 355.65 million has been approved by the Department of Trade and Industry (DTI) of South Africa to boost its garment and textile sector. The fund allocation will also create and save jobs.

“DTI through the Production Incentives Programme (PIP) within the Clothing and Textiles Competitiveness Programme (CTCP), approved US $ 355.65 million to create and save jobs in the sector,” Trade and Industry Minister Rob Davies was quoted as saying by news reports.

“In addition, US $ 225 million was disbursed until the last financial year,” informed the Minister while addressing the first Clothing Manufacturing Industry Sector Summit hosted in Durban; organized by National Bargaining Council for the Clothing Manufacturing Industry (NBCCMI).

“Throughout the sector, a number of companies which qualified and drew from both programs, were able to save 81,252 jobs. An additional 9 672 jobs were created and the net new jobs grew by 4 785 until the last financial year from the inception of the CTCP,” added Davis in a statement issued by the Government.

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He urged all the delegates to start a dialogue between retailers and manufacturers around local production and not abandon the issues of empowerment and transformation.

Appreciating the potential of a China-Nigeria economic and trade cooperation as an opportunity his country can’t afford to miss, Nigerian President Muhammadu Buhari has recently announced his country is gearing up to expand and explore new avenues in several industries, including textiles, with a focus on expediting infrastructural development in these sectors.

Maintaining that an economic cooperation between the two nations would benefit both China and Nigeria, Nigerian leader is reported to have expressed his country’s genuine wishes to further strengthen the ties.

Speaking to China’s official news agency Xinhua, before his state visit to China starting Monday, Buhari said the two countries have a lot to gain from cooperating in fields like agriculture, mining, electric power generation, and railway and road construction, besides textiles. His first China visit that begins on Monday, will conclude on Friday.

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China has the technical and financial capacity and the experience of development, while retaining the goodwill to help Nigeria, he said. “So, really, this is an opportunity Nigeria cannot afford to lose,” Buhari reportedly told Xinhua at the Presidential Palace.

Reaffirming his government’s commitment to previously signed contracts by its predecessor with Chinese firms on railway, roads and hydroelectric dam projects, Buhari exuded gratitude towards China’s continuing cooperation with his country. He added that although Nigeria happens to be the largest economy in Africa, the country is still in a bad shape, clearly in need of new projects, which China, being the world’s second-largest economy, can help undertake.

“The opportunities that present themselves for us … are virtually limitless,” he said.

Born in Daura, northern Nigeria, on Dec 17, 1942, Buhari won the presidential elections in March 2015. He was sworn in two months later.

The African continent, in general, is increasingly getting noticed by apparel buyers worldwide; and it is not just the countries of Kenya and Ethiopia.

While these two nations have been named in McKinsey & Co’s recent report, alongside Bangladesh, Vietnam and Myanmar, for being among the top sourcing destinations of apparel and footwear products, some of the other African nations that are increasingly getting international attention for being preferred sourcing destinations by apparel and footwear brands are Mauritius, Lesotho, Madagasar, Uganda, Tanzania, Botswana, Egypt, South Africa, and Swaziland. Within the sub-Saharan Africa, East African countries, Ethiopia and Kenya in particular, and Uganda and Tanzania to some extent, are of interest to international apparel buyers.

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According to a report published in South African weekly Mail&Guardian, Ethiopia has been aggressive in its search for foreign direct investment in the garment and leather manufacturing sectors. Several global brands — whether it be H&M or Wrangler, Lee or Calvin Klein — all have presence in Ethiopia.

However, this interest among international brands is not limited to Ethiopia. Since 2013, there has been a growing interest in the other East African countries as well, as potential sourcing destinations for apparel products, McKinsey reported. Besides, the renewal of the African Growth and Opportunity Act (AGOA), which gives certain countries in sub-Saharan Africa duty-free access to US markets, further opened up avenues for these countries.

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AGOA has benefited the apparel segment almost as much as it has the footwear sector in these countries. It has befitted the US as well, where companies and brands have largely imported clothing and leather goods from these countries, thanks to the easy acess rules facilitated by AGOA.

South African textile industry, which has been at a dismal state for the last two decades, is now being considered as a “high priority” sector by the South African Government’s New Industrial Policy Action Plan owing to its labour-intensive character. According to the Southern African Clothing and Textile Workers’ Union (SACTWU) apparel and textile industry is entering a period of greater stability and a higher level of growth.

The Statistics SA Quarterly Employment Survey released this week reveals that over the last 12 months – between September 2014 and September 2015 – employment in the CTFL (Clothing, Textile, Footwear and Leather) industry has increased by 1.8%. This was driven by growth in the clothing sector (676 new jobs), textile sector (1,197 new jobs) and the leather sector (268 new jobs).

Much of this development in the sector has been attributed to the concerted efforts by SACTWU’s ‘Save Job Campaign’ and the South African Government’s support measures since 2009. “Significantly, this is the second consecutive quarter that employment in our industry has grown, following the 3% increase recorded in the previous quarter,” said Andre Kriel, General Secretary, SACTWU.

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Johann Baard, Executive Director of the Cape Clothing Association adds, “The sector had established because of the Government’s support measures, that had led to greater competitiveness and improved productivity mainly due to the installation of new plant, equipment and machinery along with the exchange rate, that have served as a growing disincentive for retailers to source off shore.”

In a bid to resuscitate struggling South African apparel manufacturers, South African Clothing and Textile Workers Union’s (Sactwu’s) has sacrificed its dividend flows in a bid to retain jobs. The union acquired several well-known — but loss-making — apparel manufacturing operations from Seardel Investment Corporation in 2013. Sactwu also took a US $ 6.30 million loan from Deneb Investments, the industrial holding firm split off from Seardel — which now focuses exclusively on media assets — last year. The loan has no fixed repayment period. But as security, Sactwu has agreed to cede its valuable future dividend flows in empowerment investment conglomerate Hosken Consolidated Investments (HCI) and Seardel.