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(#4 / 2019 - 26 February 2019)

Jet Stores Namibia will soon close down some branches across the country as part of the company's turnaround strategy. EDCON South Africa, the company which owns Jet Stores, Edgars and CNA, said that they had identified stores which were underperforming. The group has 187 stores in eight countries outside South Africa. Forty-three of these outlets are in Namibia, where about 700 people are employed. READ HERE >>

Closing Jet Stores – who would have thought? Jet has been seen by some as the jewel in what is left of EDCON – a division that could easily be sold as a complete unit. EDCON has previously sold an entire division - in September 2016 it sold (with effect from end January 2017) its entire Legit chain of stores for R637m (US$45.5m) to the Retailability group.

With the closure of some Jet stores is EDCON right-sizing the group, or are they preparing the ground for a possible complete sale of the Jet division?

In other related news, a story doing the rounds is that EDCON is preparing to perhaps launch another series of shops – whose working trade name is the “Real Deal” - that may compete in the traditional Pep/Ackermans marketplace. If this is true, I guess that EDCON will use this chain to get rid of the volumes of clothes that must be filling its warehouse at its Edgardale head office complex in Johannesburg. The stock-pile there must be growing – if you are reducing the amount of floor-space that you rent you gotta do something with that stock! But maybe the Read Deal has bigger ambitions? Who knows!

Ethiopia and Djibouti are denouncing Maersk Line’s decision to impose an additional unloading fee on import containers at Djibouti ports. Recently the world’s largest container shipping company announced they would apply the so-called ‘Recovery for Handling Imports (RHI)’ on containerised cargos coming into the Djibouti, ports starting 1 February 2019. Djibouti is the main gateway for Ethiopian logistics. Logistics experts in both Djibouti and Ethiopia strongly oppose the company’s decision because, in addition to affecting Djibouti’s port activity, it could significantly increase the cost of goods coming into Ethiopia. READ HERE >>
In the “Research” section (see below) there is recently completed research paper on “The Djibouti City – Addis Ababa Transit & Transport Corridor”.

In a growing list of Bangladeshi companies seeking to invest abroad, Ananta Apparels Limited, a concern of Ananta Group (SEE >>), has sought the Bangladesh Bank’s approval to take US$8m to Ethiopia to set up an apparel factory in the country. Ananta Apparels claimed that it initiated the move to set up the garment factory in Ethiopia to enjoy Ethiopian tax benefits along with duty-free access to the US. It has also stated that it wants to take advantage of the competitive labour force there. Bangladesh Bank, however, has expressed its doubts that establishing a plant in Ethiopia would be viable. READ HERE >>

SOUTH AFRICA – 2019/20 BUDGET SPEECH, 20 February 2019
The South African government has allocated R19.8bn (US$1.4bn) for industrial business incentives, of which R600m (US$42.8m) has gone to the clothing and textile competitiveness programme (SEE >>). This will, apparently, support 35,500 existing jobs and create about 25,000 new jobs over the next three years. READ HERE >>

Budget Vote 25: Economic Development - Industrial Development Corporation (IDC)
“Loans to enterprises in priority sectors such as metals and mining, chemicals and pharmaceuticals, clothing and textiles, and agro-processing and agriculture are expected to account for 62% (R35.7bn (US$2.5bn)) of the corporation’s total loan disbursement of R57.5bn (US$4.1bn) over the medium term. Through the corporation’s support, an estimated 107,629 jobs will be created or saved over the same period.” READ HERE >> page 531

Budget Vote 34: Department of Trade & Industry (DTI)
“Key initiatives that are currently implemented through funding from the programme include the clothing and textiles competitiveness programme; … and the National Cleaner Production Centre, which supports South African industry to improve competitiveness and reduce environmental waste through the implementation of resource efficient and cleaner production methodologies. Funding for the clothing and textiles competitiveness programme constitutes 38.7% (R2.3bn (US$164m)) of total spending in the Industrial Development programme over the MTEF (“medium-term expenditure framework”) period. R600m (US$42.8m) over the same period is reprioritised towards the clothing and textiles competitiveness programme to increase investment, competitiveness and exports in the sector.” READ HERE >> page 711

I like incentives more than a six-year-old likes ice-cream. But I realise that at some point you cannot only live on parent bought ice-cream. Incentives must be rational. They must, at their core, encourage firms to produce better quality more complicated garments quicker and at lower costs; they must also encourage a systemic change and upgrading in the value chain; and they must be allocated democratically.

Junkie Incentives: After many years of government neglect the South African cotton, textile and apparel value chain needed some stabilisation – like a seriously injured victim after a car crash may need morphine. But a morphine regimen should be reduced as quickly as possible, and physiotherapy introduced to enable the patient to sustainably live without drugs. I fear that these incentives are creating a national set of drug-dependent junkie manufacturers – as what a previous value chain incentive did … the duty credit certificate scheme (DCCS).

The Great Unknown: In total - how much public money has been spent (incentives earned / grants given / loans made by national and provincial development finance institutions / money used for the various cluster initiatives) on cotton, textile and apparel incentive programmes since 2010? How many jobs have actually been saved in each sector of the cotton, textile and apparel pipeline? How many new jobs have been created in each sector of the cotton, textile and apparel pipeline? What volume of sector loans has gone into default or that have required continual top-up, or have been written-off, or have been converted to equity?

If a review was to be undertaken data should be obtained from the following: i) incentive funds allocated to the sector by the Department for Trade & Industry (DTI); and, ii) loans given to firms by: a) the National Empowerment Fund; b) the various provincially based development finance institutions; and, c) the Industrial Development Corporation (IDC).

On Democracy: My sense is – and of course I could be completely wrong - is that many of the grant incentives are being taken-up by companies that are already doing well (of course many could always improve). In my view, the designers of the value chain incentive need to look at that middle stratum of firms – those operating at average efficiency levels of between 50-65% - in order to improve their manufacturing operations. Crudely put it would really be interesting to see how many domestic (South African) apparel manufacturers (not textile firms; not design/sourcing houses) that supply the likes of Retailability (almost 500 stores), Rage (500 stores), the Otto Brothers / Power Fashion Factory (about 100 stores), Fashion World (about 200 stores), Decorfurn/CB (about 70 stores), Gemelli's stores, Contempo, Traders Warehouse, Goodhope Sales, etc ever directly access the incentives offered by the South African government? For one most of these manufacturers will most probably feel that the system is too bureaucratic and time-consuming. Also, it would be interesting to see what numbers of Pep's and Mr Price’s South African value chain vendors ever bother to apply for and then get government production incentives; or even loans. In my view its this category of firms that need incentives and to draw resources from the sectoral education training authority – not plants like Celrose and TCI Apparel; and, TFG’s Prestige.

Why no Tactical Incentives: Why are not greater volumes of state incentives orientated to elements of the textile manufacturing and textile finishing value chain so that they can upgrade their plant and equipment. Tactical investments in this area may have the effect of improving the entire value chain by enabling the production of more specialised fabrics or sophisticated quick response fabric finishing processes; and, it may improve the garment industries’ chances of competing in the “fast fashion” space!

Independent Reviews of Past Incentive Schemes: Why have there been no detailed, independent, reviews of the value chain incentive interventions run to date. I could be wrong but, I do not think that the Ministries responsible for Trade & Industry, and for Economic Development have ever requested, or received, an independent review of the value chains various incentive programmes that have been rolled-out since 2010. I guess that what they will have received will be reports from the incentive programme managers (and we know how objective that they may be); and, they may have got anecdotal pats on the back from recipients in the incentives. What is even more surprising is that the ultimate incentive paymaster – National Treasury / Finance Ministry – appears to have accepted the glowing reports and continually funnelled more cash into the sector.

So where does this leave us? Well, the South African government has commissioned a consultancy firm to develop a long-term plan for the section of the industry that supplies the country’s “fashion” retailers – the so-called “Masterplan”. But they are developing a plan based upon no empirical evidence related to past government incentive support. FFS! – this is shameful. It’s not the consultant’s fault – it is the government that should take the blame for this.

In other related news, the Southern African Clothing & Textile Workers’ Union (SACTWU) is currently conducting a mini survey to assess if it is the case that applicants for the Production Incentive (PI) are having any difficulty in claiming their PI incentive. The PI incentive scheme is administered by the Industrial Development Corporation (IDC); the SACTWU General Secretary is an IDC Board Member!

The South African Revenue Services (SARS) relaunched its “illicit economy unit” in August 2018 after it had been dismantled under a former Commissioner. SARS’ new acting Commissioner has advised that the unit was being mandated to focus on the fight against the trade in illicit cigarettes, illicit fuel and the textile products. The Commissioner said that the unit was busy with “many prongs” of focus in the illicit economy to ensure that what was “rendered to Caesar was in fact rendered”. READ HERE >>

One now hears rumours that the Economic Development Department (EDD) is now also trying to understand what are the problems confronting some stakeholders in the country’s textile and apparel industry – including smuggling. It's easy to see why. The EDD Minister, in a former life, has decades of textile, apparel and footwear industry experience. He has a sound knowledge of the sector. To me it's illuminating that EDD may be getting involved in the value chain! The question must then be ... why have SARS nor the Department for Trade & Industry (DTI) been unable to adequately address value chain issues? I have my views on SARS’ Customs and the on the DTI – and they are not pretty views either!

Woolworth’s group sales for the 26 weeks ended 23 December 2018 increased by 1.9% (+2.7% in constant currency) compared to the 26 weeks ended 24 December 2017. Sales growth was impacted by one day less of pre-Christmas trade, compared to last year. Woolworths Fashion, Beauty and Home ('FBH') Sales declined by 2.0% (comparable stores were 2.4% lower), impacted by a significantly smaller winter clearance sale in the first quarter. Sales in the second quarter of the year have, however, shown positive growth. Price movement was 1.7% for FBH, (and 0.8% for Fashion). Gross profit margin increased by 0.5% to 47.1%, from higher full-priced sales and reduced markdowns. Net retail space increased by 0.6%. Store costs grew by 4.3%, and other operating costs were 3.3% up on the prior period. Despite the gross margin improvement and good cost control, the lower trading activity led to operating profit declining by 11.8% to R915m (US$65.2m). READ HERE >>

The Group continued to experience difficult trading conditions in both its primary markets. In South Africa, low economic growth, high unemployment, modest increases in negotiated wages and higher average fuel and utility prices contributed to low consumer confidence and constrained spending, while Brexit uncertainty and weak consumer sentiment continues to negatively impact the UK economy. Group retail sales for the 26-week period ended 30 December 2018 (the current period) increased 2.0% to R10.5bn (US$760m) relative to the R10.3bn (US$745m) reported for the 26-week period ended 31 December 2017 (the prior period). Account sales comprised 51% (2017: 50%) of Group retail sales for the current period, with account and cash sales increasing by 3.7% and 0.3% respectively, relative to the prior period. Retail sales for Truworths Africa (being the Group, excluding the UK-based Office segment and comprising mainly the Truworths businesses in South Africa) increased by 2.4%* to R7.6bn (US$550m) relative to the prior period’s R7.4bn (US$535m), with account sales increasing by 3.7% and cash sales decreasing by 0.4%. Account sales comprised 70% of these retail sales (2017: 69%). Like-for-like store retail sales remained unchanged relative to the prior period, while product deflation averaged 1.5% (2017: 1.5% deflation). READ HERE >>

The South African Minister of Trade & Industry has described the signing of a Memorandum of Understanding (MoU) on Economic Cooperation between South Africa and Mozambique as a key milestone. The objective of this MoU is to provide a broad basis for cooperation between South Africa and Mozambique with the intention to find new approaches and strategies of consolidating, expanding and deepening areas of economic development, investment promotion, industrial, trade and technical cooperation.

The MoU will provide a framework under which developmental projects covering a broad spectrum of sectors can be pursued. These projects will form a basis for deeper cooperation between the two countries. Sectors that will be explored for cooperation under the MoU include agriculture and agro-processing; special economic zones and industrial parks; mining, processing and value-addition of natural resources; transport and communications infrastructure; pharmaceuticals; tourism; clothing and textiles; creative industries; and manufacturing. READ HERE >>

Often MoUs of this kind are merely agreements that involve little more than a hug – little comes of them. It is however interesting to see that textiles and apparel are included in this MoU. Does South Africa have a cunning plan? Certainly, South African firms buy some of Mozambique cotton lint; some cotton yarns (from Mozambique Cotton Manufacturers SEE >>); and clothes (mainly from Moztex SEE >>). South African firms – especially garment and home-textile manufacturers - sell a lot domestically made (and some imported) products into Mozambique. In my view, the MoU may provide the parties with an ideal opportunity to strengthen some of the trade Rules of Origin in the Southern African Development Community trade protocol. I suspect that many textile and apparel products that are traded between the two parties may not comply with the transformation criteria in the trade deal.

The Government of Senegal is in the process of approving a revised biosafety law which currently includes language for an expedited approval process for certain genetically engineered (GE) products. A draft regional biosafety law is pending approval by the Economic Community of West African States members that reportedly allows for regional approval of GE products. According to the report, because reliable information is limited, many West Africans are not well informed about the issues involved with biotechnology. Gaining future market acceptance will depend on efforts to inform and educate the public about the safety and benefits of biotechnology products. This is a regional report on West Africa that covers Senegal, Burkina Faso, Mali, Guinea, Niger, and The Gambia; and covers other crops aside from cotton – but there are a load of cotton references throughout the report. READ HERE >>

The top five companies holding the highest portfolios of non-performing loans at the Development Bank of Ethiopia (DBE) are all Turkish owned. Together with one other Turkish company, six foreign companies owe the Development Bank an aggregate of ETB8.7bn (US$4.3bn) in non-performing loans. Its perceived favouritism to Turkish companies did not stop DBE’s management from taking over three of these companies - Ayka Addis, Angles Textile and Else Addis, due to failure in servicing their debts. In another related episode, Selen Dawa Textile Factory and Saygen Dima Textile were also repossessed by the state-owned Commercial Bank of Ethiopia (CBE), for failing to pay their loans back. READ HERE >> and READ HERE >>

And I guess we now know more about why the British taxpayer is getting one of its development projects to engage consultants to figure out ways in which the Ethiopian government can dispose of problematic factories taken over by the state – even though the project is wrapped-up in “job retention and poverty reduction” goals. See: (“African Cotton, Textiles & Apparel Monitor” Vol2. #3 – 19 February 2019). It is hard to see why this is being done – except that these plants may employ lots of people in impoverished areas of the country. As far as I can see the rescue of none of these plants is critical to the Ethiopian textile and apparel value chain’s competitiveness.

It's puzzling that the DBE could not afford to engage a consultant using their own resources to do this! The most recent annual report and financial statements of the DBE can be READ HERE >>. Look at the amount of money it is owed - see "doubtful accounts" (pg 31); and, then look at the institutions that have lent the DBE money (pg 47) ... surely it's these institutions that should be providing capacity support to the DBE so that it can recoup its losses.

Ethical Apparel Africa (SEE >>) has been identified as one of London Stock Exchange Group’s “Companies to Inspire Africa” 2019. The report is a celebration of Africa’s most dynamic growth businesses. To be included in the list, companies needed to be privately held, and show an excellent rate of growth and potential to power African development. More detail on the methodology can be found in the report online at. READ HERE >>

The previous owners of Glodina (SEE >>) KAP Industrial Holdings (SEE >) have released the company’s unaudited results for the six months ended 31 December 2018. The unaudited results report states that the disposal of Glodina, a division of KAP Homeware PTY Ltd, was concluded on 22 February 2018 for R101m (US$7.18m) and became effective on 3 September 2018. READ HERE >>

At the opening of the now Industrial Development Corporation (IDC) owned facility the KwaZulu-Natal MEC for Economic Development, Tourism & Environmental Affairs, Sihle Zikalala is reported as “commend[ing] KAP Industrial Holdings, the former shareholders of Glodina for selling Glodina at a price that would allow the purchasing company to reasonably operate in a manner that will save jobs and remain competitive in the industry. READ HERE >> and READ HERE >>

I asked KAP Industrial Holdings: Mr. Zikalala implies that the Glodina asset was sold at below market value. Did KAP sell Glodina at fair market value? If it was sold at a discount why was this the case, and what was the extent of the discount?

Frans Olivier, KAP’s Chief Financial Officer, replied: “Thank you for your enquiry regarding the sale of Glodina. We sold this business, including significant property and infrastructure assets, with effect from 3 September 2018. The sale agreement includes normal confidentiality clauses, and as a result, we cannot disclose details of the transaction. Our disclosures in our financial statements are in terms of International Financial Reporting Standards (IFRS). We are very pleased that we were able to assist in creating a sustainable future for the business and the employment in the region.”

So How did the IDC Finance this Deal? ... Some Figures
On 29 September 2017, the IDC advised it had loaned Glodina Lifestyle an amount of R185m (US$13.15m) to take over a company. This deal fell through. The IDC got Competition Tribunal (READ HERE >> ) approval for it to purchase Glodina on 11 August 2018. Less than a month later, on 6 September 2018, the IDC paid an amount of R40,907,650 (US$2.9m) related to the takeover. READ HERE >>

Interestingly, Zikalala stated in his speech at the Glodina opening that the IDC: “After the completion of a due diligence process, the IDC approved a funding package of R150m (US$10.66m) for an IDC-owned entity to acquire the assets from the previous owner, a move that resulted in the factory resuming its operations.” Yet the IDC stated that it had only provided about R41m in funding. Is it possible that the IDC had underwritten a loan by the IDC to the KZN Growth Fund (SEE >>), which falls under the provincial Department of Economic Development, Tourism & Environmental Affairs (EDTEA)?
… and while the IDC was buying Glodina – we learn that on the same day its purchase was confirmed that the IDC injected a further R10m (US$710k) into another towelling factory that it already owned - Colibri Toweling (SEE >>).
It would really be interesting to know how much money the IDC has currently got invested in South Africa’s towelling industry. To date, what is its total investment (including working capital) in: i) Colibri Towelling; and, ii) Glodina Towels? It would also be interesting to ascertain if the IDC's ownership of these two large towelling plants is impacting, if at all, on other existing / potential towelling manufacturing ventures located in South Africa.

Fixing Fashion: Clothing Consumption and Sustainability”. Prepared by the UK’s House of Commons Environmental Audit Committee. 19 February 2019.
In June 2018 the UK Parliament’s Environmental Audit Committee launched an inquiry into the Sustainability of the Fashion Industry. They wrote to sixteen leading UK fashion retailers asking what they are doing to reduce the environmental and social impact of the clothes and shoes they sell. “For too long I think we’ve allowed fashion to just mark its own homework and turned a blind eye,” said Mary Creagh, a Labour MP who serves as chair of the committee. “What we’re trying to do in this report is look at what are the impacts on the planet? What are the impacts on the people who are making it?” SEE - full report and SEE - summary report

Last week (“African Cotton, Textiles & Apparel Monitor” Vol2. #3 – 19 April 2019) reported that the USAID funded East Africa Trade & Investment Hub (EATIH) making some outrageous claims about how much trade their efforts had created by them attending the Sourcing@Magic trade show in Las Vegas in early February 2019. Since then they have adopted a changing narrative approach.

ROUND 1: (14th Feb. 2019 - weekly EAITH newsletter): claims that at the Sourcing@Magic trade show that firms had made “193 business linkages for orders valued at US$20,078,000”.

ROUND 2: (a couple of days later – I guess around the 17th Feb. 2019 – by an amendment to the article on their website): it is now claimed that at the Sourcing@Magic trade show that Trade Hub-supported firms had made “191 business linkages for orders valued at US$10,275,000”.

ROUND 3: (on 21st Feb. 2019 - by an amendment to the article on their website): it is now now claimed that at the Sourcing@Magic trade show that Trade Hub-supported firms had made “191 business linkages for potential orders valued at US$10,275,000.” ... the word "POTENTIAL" has been inserted.

ROUND 4: (on 21st Feb. 2019 – weekly EATIH newsletter): under a section entitled “In the news” and obviously in an endeavour to puff itself up the Trade Hub reprints a story from one of the global textile and apparel value chain’s news agglomerators “Fiber2Fashion” which states - that the “[Trade Hub] helped them connect with US buyers and discuss their capabilities and products. Those firms made 193 business linkages for orders of over $20 million." READ HERE >> for the "Fibre2Fashion" article reprinted by EATIH.

So in spite of the fact that the Trade Hub accepts that it was not US$20m worth of orders, but US$10m of potential orders EATIH reprints a story which they know is wrong! Astonishing!

Incredible! I know! I have always been known as a rather pedantic and awkward sod. But these are serious issues!

Development work is hard work – it's really really difficult to develop sustainable (ultimately non-donor dependent) interventions that government funders can crow about almost immediately. Facilitating the growth of the order books of companies does not yield immediate dividends - if often takes 2 to 3 years to see real results. Development practitioners (and I have been one) often do not get it right. Development implementers owe a lot to the countries and the enterprises that they work with. They also owe a lot to the taxpayers that fund their activities.

Measuring success is difficult. I now see many project implementers spending too much of their own time writing reports for funders accounting for their spend – I do not think its uncommon for some to spend at least a third to one-half of their time writing reports which measure success or failure. This is madness too. Yes, one must account to taxpayers that ultimately fund programmes; but disproportionate amounts of resources should not be spent on measuring success or otherwise.

Getting his right is important – for the world is now starting to again fill with right-wing, ultra-nationalist, politicians who are just looking for any chance to terminate development projects and re-orientate their cash spent on foreign aid programmes to their domestic constituencies. If this were to happen, it would be tragic.

I'll say it again (see: “African Cotton, Textiles & Apparel Monitor” Vol2. #3 – 19 April 2019) this Trade Hub's textile / apparel / footwear / general leather goods sales (and investments secured) claims need to be examined in a thorough M&E exercise.

In February 2019, as part of ITC's SheTrades in the Commonwealth initiative (SEE >>), 13 women-owned brands from Bangladesh, Ghana, Kenya and Nigeria were supported to attend the NYNOW Winter Market Edition (SEE >>) trade show. Apparently, as a result of the intense preparation, the uniqueness and high quality of the products showcased by the SheTrades' delegation, who met with over 650 international buyers, over US$5m in new trade leads were generated. SheTrade is a project of the International Trade Centre that is funded by the UK's Department for International Development (DFID). READ HERE >>

"[N]ew trade leads" - I guess its all in the language! It will be interesting to see what volume of new business will actually have been generated by the ITC supported entrepreneurs who attended this show. It would be great to come back in 18 months time to report on the actual sales!

... and this week SheTrades in the Commonwealth, again via the ITC and via the UK taxpayer-funded DFID, will be supporting ten women-owned businesses from Nigeria, Ghana and Kenya to attend COTERIE (SEE >>) fashion trade show in New York. READ HERE >>. At the fall 2018 iteration of COTERIE SheTrades sponsored a delegation of 9 brands from Ghana, Kenya and Nigeria - which led to meetings with 100 buyers and secured US$495,000 in trade leads.

Germany’s Federal Minister for Economic Cooperation & Development recently launched a development orientated public-private partnership intervention in Ghana that focusses on addressing the vocational training needs for skilled managers and workers in the country’s apparel manufacturing sector. Apparently more than 2,500 workers in the participating local garment factories will directly benefit from the project as well as the staff of the two Ghanaian partner institutions: Accra Technical Training Centre (ATTC) and Association of Ghana Apparel Manufacturers (AGAM). For details SEE >>.

Do Regional Value Chains Undermine Decent Work, or Promote Labour Standards?”. University of Manchester – Global Development Institute. Manchester, United Kingdom. Project commenced in September 2018 and is funded by the UK's Economic & Social Research Council (ESRC) with an amount of £790,000.
Synopsis: The rise of South-South trade, involving Southern lead firms and end markets, raises a critical challenge for global governance: how can Southern markets be more effectively aligned with ethical and social standards that result in decent work outcomes? The research focuses on sourcing by South African and Kenyan retailers of horticulture and garments from South Africa, Lesotho and Kenya. It assesses the implications for attaining decent work, especially for precarious female workers. It examines whether the spread of regional value chains imply greater commercial challenges for labour, or could provide a channel for enhancing public-private governance of decent work. Full details of the research project can be found HERE >>.

Are Trade Preferences a Panacea? The African Growth & Opportunity Act and African Exports”. World Bank. Washington DC, United States. 2019.
Synopsis: Does "infant industry" preferential access durably boost export performance? This paper exploits significant trade policy changes in the US around the turn of the 21st century to address this question. The expansion of Generalised System of Preferences (GSP) products for less developed countries in 1997 and the implementation of the African Growth & Opportunity Act (AGOA) in 2001 is used to assess whether preferential access boosts exports of eligible products in general and apparel specifically. The phase-out of the Multi-Fiber Arrangement (MFA) in 2005 is used to assess whether any expansion in apparel exports survived the erosion of preferences. To find a causal impact of these changes on exports to the US from a given beneficiary country, the analysis uses a triple-differences regression and 26 years of newly constructed trade and tariff data at the country-product-year level (1992-2017). The full report can be READ HERE >>.

The Djibouti City – Addis Ababa Transit & Transport Corridor: Turning Diagnostics into Action”. United Nations Conference on Trade & Development (UNCTAD) / Mark Pearson. Geneva, Switzerland. 2018.
Synopsis: UNCTAD noted that the challenges and opportunities related to trade policy, trade facilitation, and transport components of the diagnostic studies for Ethiopia and Djibouti could only be properly addressed through a sub-regional approach to make the trading environments of both countries more efficient. It was noted that if the Ethiopia-Djibouti corridor, as the main trade artery for both countries, functions with increased efficiency, that will bring significant benefits to both nations.
  • Landlocked Ethiopia needs a liberal trade policy and an efficient and reliable transport and logistics network if it is to meet the targets of the country’s Second Growth and Transformation Plan. Currently, opportunities created by Ethiopia’s low cost inputs (labour and energy) are cancelled out by factors relating to trade logistics. For example, the labour costs of making a T-shirt in Ethiopia are one third those of China, but the logistics expenses of exporting the T-shirt mean that the Ethiopian-made shirt sells for the same price as a Chinese shirt on international markets.
  • Ethiopia’s growth strategy has been driven by a massive public investment programme which reached almost a quarter of the country’s gross domestic product in 2014 and has accounted for around half of all growth in the economy since 2011. Spending on roads has been about 4% of GDP every year over the last five years, and the Addis Ababa-Djibouti Railway has cost Ethiopia about US$3.4bn. However, without this expenditure on infrastructure there would be limited scope for improving logistics, and without such progress, Ethiopian manufacturers and other producers will not be price-competitive in most regional and international markets. The Ethiopia- Djibouti corridor provides Ethiopia’s only significant commercial access to the sea.
  • The Port of Djibouti has, since 1998, handled almost all of Ethiopia’s maritime traffic. To accommodate this, the port has invested in providing improved trade and transit facilities. Djibouti has invested just under US$900m in its portion of a standard gauge railway connecting the port with Addis Ababa. It also has invested heavily in new port infrastructure, as it is a shareholder of the Doraleh Container Terminal (of which the firm, DP World, is the other shareholder and manager) and is the main shareholder and manager of the Doraleh Multi-Purpose Port. With the railway and these new port facilities in Djibouti, Ethiopia will be able to channel more cargo through Djibouti, and Djibouti will be able to handle this additional traffic.
The full report can be READ HERE >>.
  • Morocco Fashion & Textile - Trade Show - 28-31 March 2019. Casablanca, Morocco. For more information: www.moroccostyle.net
  • Intertex Tunisia - Trade Show - 4-6 April 2019. Tunis, Tunisia. For more information: www.intertextunisia.com
  • 8th International Sustainable Industrial Areas - Conference - 8-10 April 2019. Addis Ababa, Ethiopia. For more information: www.siaconference.com
  • Source Africa - Trade Show - 12-14 June 2019. Cape Town, South Africa. For more information: www.sourceafrica.co.za
  • Premiertex Africa 2019 - Trade Show - 18-20 June 2019. Nairobi, Kenya. For more information: www.premiertex-africa.com
  • Destination Africa - Trade Show - 9-11 November 2019. Cairo, Egypt. For more information: www.destination-africa.org
  • Africa Sourcing & Fashion Week (ASFW) - Trade Show - 9-12 November 2019. Addis Ababa, Ethiopia. For more information: www.asfw-online.com
  • International Textile Machinery Exhibition - Africa - Trade Show - 14-16 February 2020. Addis Ababa, Ethiopia. For more information: www.itme-africa.com
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about Mark Bennett - Editor

"The African Cotton, Textiles & Apparel Monitor"
I have almost 30 years' experience working in Africa's cotton, textiles and apparel value chain. Initially I was, for 15 years, a sector trade unionist in South Africa; then, from 2004 onwards, I worked as a development consultant for various Southern / Eastern African governments, and domestic private sectors. In my development activities I have been engaged by private sector foundations, and by DFID and USAID funded contractors. I find it rewarding creating development interventions that help cotton, textiles and apparel stakeholders to better processes, improve productivity, increase sales and add investment. See my full CV at Devex or LinkedIn.
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