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NEWS & RESEARCH FROM THE AFRICAN CONTINENT
(#6 / 2019 - 12 March 2019)
www.africantextilesandapparel.com
NEWS

ETHIOPIA - SURVEY SHOWS 65% OF ETHIOPIAN GARMENT WORKERS EARN LESS THAN US$70 A MONTH; 8% EARN LESS THAN US$34.90 A MONTH
According to a recently released survey an individual in Ethiopia needs a monthly amount of ETB4,130 (US$144.15) to live; but after comparing this with the typical wages paid to 1,062 textile and apparel workers surveyed 92.5% of those interviewed earned less than the calculated “living wage”.

The 2018 survey – which was carried out by Mywage.org/Ethiopia
in partnership with the Confederation of Ethiopian Trade Unions (CETU) and various universities – found that 8% of garment workers earned less than US$34.90 a month; while an astounding 65% took home less than US$69.81 a month.


Ethiopia does not have a system of minimum wages – wages in the textile and apparel sector are determined by factory owners alone.
Typical Monthly Wages Paid to Ethiopian Garment Workers (2018)
Note: Ethiopian Birr – US dollar exchange rate on 31 January 2019 was ETB10 = US$0.34904 (source: www.oanda.com).
Other results from the survey - which included workers from 52 factories in three regions of Ethiopia - were:

WHAT ISSUES HAD THE HIGHEST COMPLIANCE RATES (where more than 95% of the interviewed factories were compliant)?
i) the payment of an overtime premium (98.7%); ii) no children under the age of 14 were employed (98.3%); iii) the employers pays 100% of monthly wage during maternity (96.6%); iv) pregnant women were allowed 13 weeks maternity leave (95.7%); vi) the employer did not employ people under the age of 18 in hazardous work (95.3%); vii) the employer did not discriminate on the basis of religion (95.32%).

WHICH ISSUES HAD THE LOWEST COMPLIANCE RATES (where less than 50% of the interviewed factories were compliant)?
i) the employer did not discriminate employees based on their trade union membership and related activities (45%); ii) the employer follows a policy to train workers on health and safety issues (41.8%); iii) the employer provides free protective equipment without cost to employees (41.8%); iv) the employer acknowledged the right to strike (22.9%); and, v) the employer provided job security to sick employees during 6 months of their illness (21.3%).

Mywage.org/Ethiopia:
READ HERE >> and SEE SLIDES >>

FURTHER DETAILS OF THE MYWAGE.ORG/ETHIOPIA
WORKERS' SURVEY CAN BE SEEN BELOW IN THIS NEWSLETTER

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ETHIOPIA - ABDUCTIONS / RAPES / LOW WAGES RESULT IN STRIKE AT HAWASSA INDUSTRIAL PARK, 7 March 2019
Thousand of workers in the Hawassa Industrial Park (HIP) - Ethiopia's flagship textile and apparel industrial park which is home to much of PVH's (SEE >>) garment production in the country - stopped work on the morning of 7 March 2019 due to a lack of response to their problems with their low salaries, their unsafe working environment, and them being exposed to sexual abuses and abduction.

The workers complained that their wages are far below their expenses. One worker said that she had been working in HIP for the past two years and her salary was still ETB750 (US$26.18) per month, which did not cover her home rental. She added, “we were told that the pay would be ETB2,000 (US$69.81), but it’s been ETB750 for last two years.” READ HERE >>

Comment
This is a developing story - as at 11 March the HIP strikes were ongoing!


ETHIOPIA – INTERVIEW WITH ANTEX GROUP, 25 February 2019
Interview with Anhua Qian owner of the Antex garment manufacturing facility which is located in the Adama Industrial Park.

Question: What challenges are you encountering in Ethiopia?
Anhua Qian: Yes, there are challenges. The company began producing apparel on 12 October 2018, and still, there is no power supply, and we are working using a generator. The problem with the generator is that it doesn’t fully run the machines, and it affects our efficiency. Petrol also costs us a lot. In addition, there is no water supply after three months. Another problem is transportation. The Adama Industrial Park is a bit far away from the city and there is no access to transportation for the 1,600 employees. They walk more than five kilometers every day which negatively impacts their efficiency. The customs clearance system should be done in a short period of time. Importing the raw materials from abroad take their own time.

Question: Employees say the salaries are too low, what is the reason for this?
Anhua Qian: Yes, I understand that, but all are connected to the company’s productivity. For the time being, the company pays a basic salary of ETb750 (US$26.17), plus ETb100 (US$3.49) for a newcomer with no experience if they have full attendance, and ETb400 (US$13.96) for transportation allowance and free food in the factory. We have the system of paying allowance and bonuses according to skills and efficiency. READ HERE >>

Note: The Adama Industrial Park - 100kms east of the capital Addis Ababa – was inaugurated on 7 October 2018. The industrial park will apparently specialise in the production of textiles and apparel. The first phase of the park, developed by the Industrial Parks Development Corporation (IPDC), has 19 sheds that lie on 102 hectares land. The industrial park's development cost more than ETB4.1bn (US$143m), and it is expected to create jobs for 25,000 workers and result in revenues of US$40m a year.

Comment
Incredulous. No water! No power!


MAURITIUS – A TEXTILE AND GARMENT INDUSTRY IN CRISIS? 8 March 2019
Mauritius’ Palmar textiles and apparel are in financial trouble, as is Future Textiles which is rumoured to be going into "receivership". There are also reports that a third value chain firm, Tex Wash, may soon be out of business; while there are reports that four textile companies who are members of the Mauritius Export Association (MEXA) could follow suit – these are: Jack Tellor International, Nouvelle Lingerie Mauricienne, Tricot, and Tara Knitwear. The former president of Enterprise Mauritius, recalls that the crisis in the sector is cyclical: "This is not the first time the sector has faced crises. There were crises in the 70s, 80s and 2008.” READ HERE >>
(this is in French you may need to use Google Translate services)


RWANDA – MOSQUITO BED-NET FIRM TO OPEN, 21 February 2019
A Rwandan firm, Vision Garment (a subsidiary of the Millennium Saving & Investment Co-operative), is set to begin the production of mosquito bed nets in April 2019. It claims that it produces 1.7m nets every month. Rwanda spends a staggering Rwf15bn (US$17m) every year on importing mosquito nets, which are distributed to the citizens under the first and second category of Ubudehe free of charge. The interest to produce bed nets locally was prompted by a controversial deal in 2015 in which 2.6m sub-standard mosquito nets worth Rwf9bn (US$10.2m) were imported, triggering a surge in malaria cases. Construction of the mosquito net factory is underway at the Kigali Special Economic Zone; with plans to construct another plant in the Rwamagana Industrial Park. Vision Garment also has plans also to produce 88 tonnes of garments per month. READ HERE >>

Comment
Apparently!


SOUTH AFRICA – EDCON RETAILER AFTERMATH, 6 March 2019
To assist South Africa’s embattled apparel retailer – the EDCON Group – some South African shopping mall owners have agreed to allow EDCON to renegotiate the property leases that it has with them; while some have also agreed to rental reductions. In return, EDCON has had to allow these property companies to get a stake in their business.

The Vukile Property Fund has agreed to invest R37m (US$2.56m) in EDCON - the capital would be provided in four equal amounts at six-monthly intervals over two years starting in December 2019. The company said EDCON represented 2.5% of the Vukile’s groups total rental income, down from 3.2% in March 2018. Vukile also said that EDCON’s footprint in its shopping centres would decline further and negotiations to achieve this were at an advanced stage. EDCON stores in Vukile’s portfolio would be reduced by 11 to 43 stores by 1 August 2019, and the total EDCON footprint in Vukile’s portfolio would decline from 56,656m² to 40,086m².

Property company Attacq has stated that its effective South African EDCON exposure would settle at 22,945m² by 1 October 2019. The company warned that its involvement in EDCON’s recapitalisation programme would negatively impact its 2019 financial year distributable earnings by R4.1m (US$284k).

The Hyprop property company has said that it had agreed to support the restructuring proposal with a reduction in rentals, compensated for by equity participation in EDCON. “While this will impact distributable earnings in the 2019 and 2020 financial years by 0.8% and 2.3%, respectively, it is considered an acceptable limitation of the risk”. One analyst commented: “It’s a tough call for landlords as EDCON anchors most malls and most malls were built around EDCON. Some of the older leases have clauses that attracted other retailers on condition that EDCON is in the mall.”
READ HERE >> and READ HERE >>

Comment
It just shows what can be done when minds are focused. In the short term, it looks like EDCON will be saved. However, there is a downside - its clear that EDCON is going to be cutting back in the amount of floor space that it rents. This will impact on the manufacturing sector as less floor space will mean fewer garments on being bought by EDCON buyers. What will be interesting is how the shopping mall owners deal with requests from rival retail giants – such as the Mr Price Group, TFG (Foschini), Truworths, Cotton-On, Zara, H&M, etc. - who will all be clamouring for rent reductions.

Now the South African public awaits news of what will happen to the EDCON owned Celrose garment and footwear manufacturing facility. Will South Africa’s Industrial Development Corporation (IDC) be forced to buy EDCON’s shares in Celrose … or will some other company buy into Celrose?



NIGERIA
NO FOREIGN EXCHANGE TO IMPORT TEXTILES, 7 March 2019
The Central Bank of Nigeria (CBN) has announced plans to revive Nigeria’s textile industry, unveiling measures that will see the development achieved. In this context, the CBN has access to forex by the importers of textiles and other clothing materials into the country. Henceforth, importers of textile and textile materials would not be able to purchase foreign exchange from banks and bureaux de charge as well as other operators in the official foreign exchange market. Apparently, this restriction will boost the domestic textile industry as well as create jobs for Nigerians.

It was also revealed that the CBN would initially support the importation of cotton lint for use in textile factories, with a caveat that such importers will begin to source their cotton needs locally starting from 2020. Other support measures will include financial support to textile manufacturers with the provision of funds at a single-digit rate, to refit, retool and upgrade their factories to produce high-quality textile materials for the local and export market.

As part of its Anchor Borrowers Program (ABP), the CBN will support local growers of cotton to enable them to meet the needs of the textile industries in Nigeria. The CBN “shall also support efforts to source high yield cotton seedlings so as to ensure the yields from our cotton farmers meet global benchmarks.” In response to the problem of stable electricity, the CBN has also offered to support the creation of textile production centres in certain designated areas in Nigeria where access to power would be guaranteed.

It was noted that in the 1970s and early 1980s, Nigeria was home to Africa’s largest textile industry, with over 180 textile mills in operation, which employed close to over 450,000 citizens. Back then, the textile industry was supported by the production of cotton by 600,000 local farmers across 30 of Nigeria’s 36 states. Nigeria currently spends above U$4bn annually on imported textiles and ready-made clothing with a potential annual market size of more than US$10bn.
READ HERE >> and READ HERE >>

Comment
Its unclear if this ban also affects clothing products. But. What a stupid decision. It is very unlikely that the remaining Nigerian textile mills will be able to supply the country’s garment manufacturers with all the kinds of fabrics that they would need. If this new measure is ever implemented, it is predictable that it will collapse very soon.

NIGERIA TEXTILE STRATEGY MISSES ALL TARGETS, 11 March 2019
Four years after the Federal Government approved a national policy on cotton, textile and garments, Nigeria is yet to meet any of the targets set in the policy. In 2015, the government through the Ministry of Industry, Trade & Investment, launched the National Cotton, Textile & Garment Enterprise Policy to stimulate the textile industry.

The policy document projected savings of US$2bn in foreign exchange through import substitution, increase in the level of direct employment in the sector from the then 24,000 workers to 50,000 workers by the end of 2015 and to 100,000 workers by 2017. These targets have not been achieved even by 2019. The policy also targeted an increase in seed cotton production in the short-term from 200,000 tonnes to 500,000 tonnes by the end of 2015 and indirect employment expected to increase from the current level of 650,000 people to 1m people by 2015 and 1.3m people by 2017. Export earnings are also expected to grow to at least US$3bn annually or 0.5 % of the global share of international trade in textiles and garments in five years. FDI into the Nigerian textiles and garment sector will increase to as high as N255bn (US$705m) cumulatively over the next five years.”
READ HERE >>

Comment
It seems like Ethiopia is not alone in setting unrealistic production, investment and export targets!


KENYA - BT COTTON, 21 December 2018
Bt. cotton will likely be the first commercially approved genetically engineered (GE) crop for cultivation in Kenya. The Kenyan government’s priority to revive its cotton and textile sector under the President’s Big Four Agenda that supports the manufacturing and food security pillars favours Bt. cotton’s early release into the market. The import ban on GE products remains, limiting GE technology adoption and acceptance, severely and unduly restricting exports and food aid assistance. READ HERE >>
THE SURVEY OF ETHIOPIAN WAGES ... CONTINUED ...
While the survey does not make it explicitly clear but it could be the case that the typical wages paid to Ethiopian workers recorded are lower than what they actually are because of overtime payments, performance bonus payments, attendance bonus payments, etc.

It’s also perhaps likely that the average wages recorded in the survey are distorted by the fact that some of the people that may have been interviewed would typically fall outside of a traditional blue-collar bargaining unit (e.g. low level managers, supervisors, some workers involved in clerical occupations, etc.). Thus, the inclusion of the outside of the standard bargaining unit employees in the survey would have had the effect of raising the average wages paid.

One can anticipate that employers will say that the total remuneration received by their workers is higher than what the survey showed because they have obligations to pay for or subsidise the provision of some meals, and transport, etc.

To contextualise the typical wages paid in Ethiopia one can look at the minimum wages stipulated for garment workers elsewhere in the world.

Minimum Wages Stipulated for Garment Workers Elsewhere in the World
Source: The above minimum wages rates were derived from a cursory internet search. The local currency to US$ conversions was derived by using ‘Google Currency Converter’ on 8 March 2019.

Notes:
It's important to note that the above minimum wage rates are subject to many caveats.
  • Clearly, workers in each of the above countries will not have the same standard set of monthly working hours. For example: workers in one country could be employed on a standard 45-hour working week before overtime payments kick in; while in other countries production workers may work a 48-hours a week before overtime pay.
  • It’s also often the case that within some countries there are different regionally set minimum wages. In South Africa, the minimum wage system for garment workers sets at least six sets of geographically determined minimums. There are also different, regionally set, minimum wages paid to garment workers in Kenya, the Philippines and Vietnam.
  • In some countries a single legislated minimum wage will apply to every worker engaged in a garment factory from a general labourer, to a sewing machinist, through to a pattern maker. While in some countries minimum wages are specified for specific occupations in the garment industry. It’s also sometimes the case that even within a single occupation that there are different minimum wages paid – concepts like “probationary” wages, “learner” wages, and “qualified” minimum wages creep into wage systems.
  • In some countries minimum wages are unilaterally determined by government decree – often influenced by electoral cycles; while in other countries more inclusive bargaining processes (with the threats of work-stoppages) determine minimums.
  • The mere existence of a statutory minimum wages does not mean that employers abide by what the law prescribes. For example in South Africa there is widespread non-compliance with industry minimum wages in the garment industry - few of the buyer/retailer driven value chains check manufacturers for compliance with legislated minimums.
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Its important to contextualise how low the typical wages are that are paid to Ethiopian garment workers by considering the World Bank's global poverty indicator. SEE >> In the Bank’s view anyone earning less than US$1.90 per day (for a 30 day period that’s about US$57.00) is living in poverty!

Comment
But while there are significant caveats to global wage data it does not mean that some comparisons cannot be made.

The wages in Ethiopia are exceptionally low no matter how one throws the dice. The low wages are, in my view, one of the main reasons why a number of global apparel brands and retailers have been prepared to encourage some of their manufacturing vendors to set-up in the country. Thus it would be counterintuitive to expect that they would take any steps to improve the level of basic wages paid.

The low wages paid in Ethiopia are perhaps also the reasons why there are frequent work stoppages in Ethiopian factories. Take for example the most frequent wage strikes that occurred in the Hawassa Industrial Park in March 2019.

Low wages are most probably also the reason why many people enter and then almost immediately exit the garment industry – surely it must be recognised that paying better wages will not only mean less work stoppages but it will also mean increased productivity!

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MyWage.Org/Ethiopia Survey Methodology

A total of 1,061 workers from 52 factories in three regions of Ethiopia were surveyed:
  • in Addis Ababa – 24 factories were covered
  • the Oromia Region – 17 factories were covered
  • Hawassa – 11 industrial park factories were covered.

The workers interviewed were generally chosen on the basis of a random sample – although the selection process was often done in consultation with factory authorities and in some cases trade unions leaders. Workers interviewed came from different units/departments of the factories where they worked.

The structured interview (done in Amharic; with each interview lasting between 10-20 minutes; and conducted near to factories) collected information on: demography, employment security, working hours, wages paid, maternity and work, health and safety, social security, fair treatment, and the right to organise.

According to myWage, the process of interviewing workers was not easy. The exercise encountered challenges including: strong resistance from some employers (especially in industrial parks except in the Hawassa Industrial Park), a lack of awareness by employers and employees about the relevant aspects of decent work in workplace, pre-determined sampling by employers, a lack of trust by employees (they assumed data collectors work for employers and they were pessimistic about change the surveys bring to their life).

In approximately a year from when the last survey was conducted the Wage Indicator team will go back and resurvey all factories to check for any improvements!

---------------------------------------
ABOUT THE PROJECT
LIVING WAGES IN THE ETHIOPIAN GARMENT SECTOR

FUNDER: FNV Mondiaal (SEE >>)
PROJECT IMPLEMENTOR: WageIndicator Foundation (SEE >>)
PROJECT PARTNERS: Confederation of Ethiopian Trade Unions (CETU)
PROJECT DURATION: January 2018 to January 2020
PROJECT WEBSITE: www.mywage.org/Ethiopia

Goals of the project:
  • a commitment by garment factories to pay living wages within a timespan agreed with trade unions
  • a commitment of garment factories to improve compliance with labour laws within the timespan agreed with trade unions
  • a commitment by garment factories to conclude, use and improve collective agreements.

In order to achieve the above the project will calculate living wages based on surveys of the prices of goods/services consumed by workers; and, the wages actually paid to garment workers.

For more details
READ HERE >>.
SNIPPETS FROM AROUND THE WORLD

AN AUSTRALIAN TAKE ON GARMENT PRODUCTION IN VIETNAM AND BANGLADESH
Australian fashion companies use a "system of entrenched exploitation" that is trapping millions of garment workers in Bangladesh and Vietnam in poverty, campaigners have said.
Apparently 9 out of 10 garment workers in Bangladesh and over two-thirds of those in Vietnam can't make ends meet, with wages as low as 55 Australian cents ($0.39) per hour, according to a study by charity Oxfam Australia. SEE >>
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WWW.AFRICANTEXTILESANDAPPAREL.COM
PROJECT NEWS
ACTION-COLLABORATION-TRANSFORMATION (ACT)
"the living wage initiative"
PROMOTING CENTRALISED BARGAINING IN THE GARMENT INDUSTRY TO ACHIEVE A LIVING WAGE

"ACT (Action, Collaboration, Transformation) is an agreement between global brands and retailers and trade unions to transform garment, textile and footwear industry and achieve living wages for workers through collective bargaining at industry level linked to purchasing practices.

"Collective bargaining at an industry level means that workers within a country can negotiate their wages under the same conditions, regardless of the factory they work in, and the retailers and brands they produce for. Linking it to purchasing practices means that payment of the negotiated wage is supported and enabled by the terms of contracts with global brands and retailers.

"ACT is the first global commitment on living wages in the sector that provides a framework through which all relevant actors, including brands and retailers, trade unions, manufacturers, and governments, can exercise their responsibility and role in achieving living wages.

"ACT members have agreed the following the principles:
  • A joint approach is needed where all participants in global supply chains assume their respective responsibilities in achieving freedom of association, collective bargaining and living wages.
  • Agreement on a living wage should be reached through collective bargaining between employers and workers and their representatives, at an industry levels
  • Workers must be free and able to exercise their right to organise and bargain collectively in accordance with ILO Conventions.
Some of ACT's members include: Arcadia, ASOS, C&A, Cotton-On Group, Debenhams, Esprit, H&M, Inditex, Primark, PVH, target Tschibo, Tesco; and trade union Industriall

More details on ACT can be found here: www.actonlivingwages.com

Comment
I like centralised bargaining - as a trade unionist in South Africa I must have spent at least ten years of my life building centralised bargaining structures. It can deliver significant benefits - but while one builds centralised bargaining life has to go on - member's wages have to be negotiated, industrial policy engagements with the government have to continue, and recalcitrant employers persuaded. And so with ACT - while efforts to build centralised bargaining occur it does not mean that they cannot develop interim solutions for extremely low wages.

I also learnt that one could not wait forever - it was best that centralised bargaining came about through negotiation and agreement - but if not it was also useful to flex shop floor muscle.

------------------------------------

So lets bring this back to Africa - and to Ethiopia - the place where some of the lowest wages in the world are paid to textile and apparel workers. Its also the place where some ACT's private sector apparel brands and retailer members dominate the sourcing landscape - importantly PVH and H&M. It's also the place where global trade union federation IndustriAll has an affiliate active in the country's textile and apparel manufacturing sector.

On 7 March 2019 I wrote to the ACT CEO - Dr Hoffer - and asked:

"Given that some of the lowest wages paid to textile and apparel workers anywhere in the world today, aside from garments made in some countries' prison labour systems, are most probably paid to value chain blue-collar workers in Ethiopia why is it the case that ACT has decided not to also focus on establishing a system of centralised bargaining in Ethiopia that could perhaps see workers' typical wages rise to the level of a "living wage?

"I ask this question in the context of the fact that it may be the case that the prevailing conditions in Ethiopia might be right for an initiative that ACT is promoting - centralised bargaining which will lead to sectorally determined, minimum, living wages.

"These favourable Ethiopian conditions would include:
  • IndustriAll has an affiliate in Ethiopia - the Industrial Federation of Ethiopian Textile, Leather & Garment Workers Trade Unions
  • a number of the corporate apparel brands and retailers that are members of ACT buy significant volumes of garments from Ethiopian production units - many of these buyers intend to ramp-up their purchases. Both PVH and H&M, in particular, buy huge numbers of garments from Ethiopia - indeed, both have placed such large sourcing bets in the country that they have persuaded some of their key Asian manufacturing suppliers to establish large manufacturing operations in the country. Apparently, PVH is so committed to the country that it has even taken the step (unusual for it) of taking a majority (75%) share in one of the manufacturing plants in the country.
  • there does not seem to be a multiplicity of trade unions active in Ethiopia's textile and apparel industry - as there are in countries like Myanmar and Turkey where, according to the information I have, these disunited unions frequently undermine efforts to achieve centralised bargaining. In other words, it may be easier to win centralised bargaining and a potential path to a "living wage" in Ethiopia than it would be in places like Turkey and Cambodia (ACT pilot countries) where there are huge problems.
  • its been rumoured that the Ethiopian government is considering a range of amendments to the country's labour laws. Thus, this could be the ideal opportunity to propose a system of sector centralised bargaining - even if it were only in respect of textile and apparel companies that are located in the country's state/private sector owned industrial parks, or the companies that take advantage of country's significant tax breaks."

Dr Hoffer responded on the same day:
"We have so far not engaged in Ethiopia. However for some of the reasons you are mentioning we decided to explore the situation and potential in Ethiopia in 2019. Unfortunately, we have not sufficiently advanced in this process to provide you with meaningful answers to your questions at this stage."

Comment
It is clear that nothing is ever gonna happen in Ethiopia soon. ACT seems to be focused on Turkey, Myanmar and Cambodia. If they achieve living wages there at least those companies can then escape to low cost Ethiopia! Or am I too harsh ... and too cynical?

But this is what puzzles me. If apparel brands and retailers recognise that some manufacturing vendors may not pay a "living wage" there is nothing to stop them from amending their sourcing practices and requiring that their vendors to meet minimum wage levels. But maybe this is utopian thinking!

In Ethiopia, the likes of H&M or PVH could nudge their vendors to pay better wages. If PVH can insist, as one of their former employees told me, that any plant setting-up in HIP had to conform with their zero liquid discharge standard why should they not insist that companies in the industrial estate also met specified levels of pay norms? But this is no time to dream.

In the meantime - I wonder how many years it will be before one sees better wages being paid in Turkey, Cambodia and Myanmar.
DO EAST AFRICAN INVESTMENT PROMOTION AGENCIES ACTUALLY CARE ABOUT GETTING NEW TEXTILE & APPAREL INVESTORS?

I know that Uganda does cares - but the rest clearly do not!

Many African countries would like a textile and garment manufacturing industry to form an even greater part of their economies. In this context they actively solicit the support of international donors to assist them to further develop their existing value chains - research, investment solicitation trade missions, capacity building courses, attending trade shows are all part of the support they desire.

But how serious are these governments, and their parastatals, about developing their textile and apparel value chain? What efforts do they actually put in?

I decided to test how serious they were at chasing investment leads.

On 2 March 2019 I wrote to the core national investment promotion and related agencies in East Africa and asked for some basic information that any potential value chain investor would want when scouting a place to initially locate a garment manufacturing plant – and perhaps later, a textile manufacturing facility.

I used the general email addresses that the various investment promotion bodies listed on their websites, and requested, using the guise
of a potential investor, the following data:
  • the existing statutory minimum wages that would apply to workers in the textile and apparel manufacturing industry
  • the electricity, water and sewerage tariffs related to a high use industrial consumer in the capital; (and another destination in the country for water supply)
  • the total costs of an expatriate work permit; and an indication of how many a company would be entitled to apply for assuming this firm would employ approximately 800 local workers
  • the typical costs associated with renting a 5,000m2 building that could house a garment manufacturing plant.
I asked for additional details related to when these minimum wages and tariffs were set; and when it was anticipated that they would be next adjusted.

After six working days these are the responses I received:
Comment
Astounding! One can only imagine how existing private sector investors may struggle when they raise problematic issues they are experiencing with the relevant investment promotion agency's aftercare unit!
Postscript
I also asked the Gatsby funded Tanzania Textile Development Unit (TDU) SEE >> if they could provide me with the same information. After a couple of days I received a response that the message I sent to the general email address listed on their website could not be delivered! Sigh! So much resources - so few eyes on the small details that often really count!
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RESEARCH

"Cotton: World Markets & Trade". US Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS). Washington, D.C., United States. March 2019.
Synopsis: USDA’s first 2019/20 world cotton projections anticipate that production will exceed consumption, raising world stocks slightly by 1m bales. The outlook for China shows imports, consumption, and production projected up, while stocks are expected to fall for the fifth consecutive year. With the decline in China’s stocks, stocks outside of China are projected to increase significantly. As a result, the average A-Index and the season-average US farm price are expected to decline.

World cotton production is expected to rise 6.8% with yields rebounding in several countries and area also rising. US 2019/20 cotton production is projected at 22.5m bales, based on higher planted area and sharply lower abandonment. This would be the third-highest production on record; if realised, the expanded production would account for half of the growth of global output. World trade is projected to grow, bring it near the record levels seen in 2011/12 and 2012/13. Much of the increase is expected in China as smaller sales from the State Reserve reduce available domestic supply, meaning that higher imports will be needed to close the gap. Global consumption is expected to continue growing, but at a rate slightly below its long-run average based on weaker global economic growth. The full paper can be READ HERE >>.


Case Study Report: Industrial Park Development in Ethiopia”. United Nations Industrial Development Organisation (UNIDO). Inclusive & Sustainable Industrial Development Working Paper Series No. 21. 2018.
Synopsis: Economic growth in Ethiopia is progressing at an impressive rate, where industrial parks have piqued the interest of international investors in the country's economy. This Industrial Park study aims to analyse the adequacy of industrial parks as a means for industrialisation, and focuses on how to use industrial parks effectively, seeking to answer three main research questions: What is the current status of Industrial Parks in Ethiopia? How could the country’s industrialisation benefit from industrial parks? How could industrial park development be enhanced in future?

Findings presented in this study are derived from extensive research and analysis of primary and secondary sources as well as from field findings conducted in Ethiopia throughout 2014 to 2018 in tandem with the implementation of Programme of Country Partnership by UNIDO and the Government of Ethiopia. The study determines that industrial parks in Ethiopia have contributed significantly to the nation’s industrial development in terms of creating employment, increasing government revenue and export, diversifying the industrial products, attracting Foreign Direct Investment, and attracting foreign exchange. Some newly built industrial parks have also started to implement sophisticated technology and introduce it to the local manufacturing sector.

The study also finds that the government, industrial park developers and resident firms in Ethiopia experience multi-faceted challenges, such as complications associated with administrative and regulatory capacity building, coordinating key actors and stakeholders, infrastructure and public utility provision, financing issues, skills development, and linkages with local economies.

Recommendations are given on how to improve efficiency of regulatory bodies, how to ensure sufficient funding for infrastructure development, how to promote linkages between industrial parks, the local labour market and local companies; and how to support technical education and training for industries targeted by industrial park development strategy through aligning curricula of universities and Technical Vocational Education and Training institutions with private firm labour requirements. In this connection, the study provides some ‘food for thought’ in addressing these challenges by all relevant stakeholders. The full paper can be READ HERE >>.
UPCOMING EVENTS
  • African Cotton Association - Annual Conference - 14-16 March 2019. Bamako, Mali. www.africotton.org
  • 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
COMMENT!
OH THIS IS GONNA BE INTERESTING - TWO MAINLINE AFRICAN TEXTILE & APPAREL SOURCING EVENTS HELD AT THE SAME TIME ... THE ASFW AND THE DESTINATION AFRICA TRADE SHOWS!
CLASSIFIEDS
JOBS, TENDERS & PROCUREMENT
MANUFACTURING EQUIPMENT WANTED / FOR SALE
Looking for staff? Want to engage a consultant? Have equipment to sell? Do you need 2nd hand machinery? Have a tender? For a limited period the "African Cotton, Textiles & Apparel Monitor" will publish (free of charge) select classified advertisements from firms / development organisations active in the Africa's crop to shop value chain. Adverts limited to 50 words / 300 characters (and may include a mini logo).
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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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