When the World Trade Organization ended the textile and clothing quota system in 2005, large textile and clothing producers such as China and India were amongst the key beneficiaries, while Africa was among the big losers. As part of the Chinese and Indian supply chain, other South East Asian countries like Bangladesh, Cambodia, Sri Lanka and more recently Vietnam benefitted from this transition. Before 2005, many of the investors in the African textile and clothing industries came from the Middle East, India, Pakistan, Sri Lanka and Taiwan. Ever since they returned to Asia.
The effect of the quota system on the African textile industry is clear from the trade figures: imports into the USA from Sub-Saharan countries dropped from 1.8 billion US$. in 2004 to just over 1 billion in 2016. 2017 does not show any further improvements.
In Nigeria, for example, between 1985 and 1991, the textile and clothing industries recorded an annual growth of 67%, and as at 1991, it employed about 25% of the workers in the manufacturing sector. In Mauritius, the textile and clothing industry experienced a rapid growth in the 1980s up to the year 2000 when it employed over 80,000 people, or over 70% of the total manufacturing industries. Other African countries were experiencing similar trends. In addition, the USA implemented the AGOA African Growth and Opportunity Act in 2000. Many sub-Saharan countries were eligible for special conditions to export a wide range of goods and products to the United States under the AGOA Act. Countries like Lesotho benefitted from this and set up an important clothing industry.
However, with the abolition of quota in 2005, Sub-Saharan countries were not really able to improve the performance and development of their textile industries. Many jobs were lost and textile companies closed after 2005. Now also eligibility of African countries for AGOA is under continuous pressure.
Politics can be seen as having a very high impact on the global development of the textile & clothing industries. Globalisation and government policies (investment and trade) in China and India have resulted in a boom of the Asian textile industry. At the same time it affected negatively the Sub-Saharan textile industry.
The development of the textile & clothing industries in Turkey can equally be seen as a result of government policies: free access to the European market and strong government support still make Turkey one of the stronger textile producing countries at present.
Regional trade agreements implemented by governments and driven by political ideologies can indeed influence heavily the industrial development of countries and the prospects of generations of people. When looking at how Europe’s imports have evolved since 2000, one can see again the enormous impact of the abolition of quota. While in 2004 imports from China into the EU of textiles and clothing reached just over 16 billion €, for Egypt/Morocco/Tunisia combined this was just over 6 billion €. Since then imports from China have reached over 40 billion € while North African imports stagnated. Could the present European migration crisis have been prevented if North Africa would have received a fair share of the trade growth into Europe?
The European Union is in the process of negotiating and signing seven “Economic Partnership Agreements” (EPAs) with regional groups in Africa, the Caribbean and the Pacific. Economic evidence of who is to benefit from it is mixed and although there will be trade gains on both sides, it is European exporters that would be the biggest winners. Africa’s agricultural industry could benefit but the manufacturing industry would come under greater pressure.
What is then the future of the textile & clothing industries in Africa? While labour costs are competitive in a wide range of African countries compared to Asia, especially with costs in China growing rapidly, they lack training, both at middle management and operator level, they cannot benefit from economies of scale like China or India and corruption is still important. The African textile & clothing industry failed to industrialise on a large scale although in theory the conditions were good. There are good examples of industrialization, even if on a lower scale then in Asia. Further industrialization of the African textile & clothing industries to satisfy growing global consumption of clothing, home and technical textiles can happen in Africa. But it will require an important, consistent and long lasting political commitment and the vision to implement the right policies. If the textile & clothing industries in Africa are to flourish, it requires political will in both North and South.