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(#10 / 2019  -  9 April 2019)
US Customs Team Inspect AGOA Exporters in East Africa
Trade Data -
East African Apparel Exports to Core Markets
Political Protests Close Hawassa Industrial Park - Home to PVH and H&M
Rumour has it that the South African consultants - B&M Analysts (SEE >>) – who have been engaged to work on South Africa’s Retail – Textile, Clothing, Footwear & Leather (R-TCFL) value chain development strategy (aka “the Masterplan”) are sticking with their initial recommendation that textile / apparel / footwear products imported into South Africa should only enter the country via dedicated ports of entry.  The customs ports they have designated are:  Durban (seaport), Port Elizabeth (seaport), Cape Town (seaport), and, OR Tambo (airport).

If the consultant’s proposals for dedicated ports of entry is agreed to by the South African government it will ultimately destroy the textile and apparel industries that exist in countries like Lesotho, Botswana, eSwatini/Swaziland (these latter three states are members of the Southern African Customs Union (SACU) along with South Africa), Mozambique and Zimbabwe.  For they will have to transport their goods long distances to clear them in over-crowded customs facilities - resulting in greater costs and an inability to supply their customers quickly.

Ironically the garment and textile export industries of Madagascar and Mauritius – some of whose manufacturers are rumoured to cheat on the SADC trade protocol’s trade rules of origin - will be relatively unaffected as most of their exports to South Africa enter the country through the proposed designated ports in any case.

It will be interesting to see what empirical evidence the consultants got to back their assumptions that there is significant smuggling of goods coming through some of the land border posts.  I have no doubt that some of these states are smuggling conduits - but enough to close their borders?  Did the consultants engage with South African Revenue Services (SARS) on a one-on-one basis to test the opinions and data given to them by some South African stakeholders?  Alternatively, are some of the smuggling concerns based on anecdotal evidence of some stakeholders, some of whom also have the intention of merely wanting to keep any competition out of the South African market place?

I wonder if the consultants have considered the following:
  • how to address the issue of producers in some Southern African Development Community (SADC) member states from evading the proper application of the trade rules of origin contained in the SADC protocol on trade.  Have the consultants examined ways to strengthen the application of the bureaucratic procedures related to trade rules of origin that are contained in the about to be concluded Tripartite Free Trade Area (TFTA – involving the member states if SADC, the EAC, and COMESA), and the African Continental Free Trade Area (AfCFTA)?
  • that all textile and apparel retailers, especially those with stock exchange listings, must put in place internal due diligence initiatives (that will be audited by independent third parties) to ensure that their buyers do not procure any smuggled goods – including goods bought from third-party sourcing houses and design centers.
  • that the customs division of SARS must develop in-house specialist capacity related to textiles, apparel and footwear smuggling. It is this body that should advise on how to strengthen border procedures - based on textile and apparel smuggling intelligence gathered.
It’s unclear whether B&M Analysts remain wedded to their Masterplan proposal that South Africa should move away from ad valorem textile and apparel customs duties (i.e. percentage-based payments) to specific duties based on the weight of select items imported.  This proposal was apparently made in order to limit smuggling.  It is understood that it has been repeatedly pointed out to the consultants that this unit of measure switch move could make South Africa non-compliant with World Trade Organisation (WTO) rules.  Apparently, the consultants acknowledged that this could be the case – but their defence was essentially … “let's continue with this approach - it would take ages for the WTO to process and then finalise a challenge to South Africa.”

If I were a garment manufacturer in a neighbouring country that uses land-border crossings to get textile and apparel goods into South Africa I would start petitioning my government to raise a concern with this B&M dedicated ports of entry proposal with the South African High Commissioner resident in their home countries.


From what I have heard, and from what documents I have seen, I have several problems with the Masterplan that has been developed.  It has many weaknesses – and in some areas lacks the strategic insights that will radically transform the value chain.  But I am not alone with criticisms – apparently South Africa’s Department of Trade & Industry also has issues with the Masterplan – for, apparently, they returned the Masterplan to the consultants and asked that more work is undertaken in some areas. 

Apparently, a Masterplan reference group will meet in late April 2019 - hopefully a week before this the consultants will deliver to stakeholders a draft copy of their report so that stakeholders can consult with their constituencies - its been suprising that thus far stakeholders seem to be content with consultant powerpoint presentations and the occasional narrative report. One wonders how they have managed to report back to their membership.

More on the Masterplan in forthcoming editions of this blog/newsletter – apparently, the South African Minister of Trade & Industry has requested that final Masterplan should be delivered by the first week of May 2019.  A national general election is taking place the following week - so maybe a new Minister of Trade & Industry will have to consider the report.

Seems like internal political tensions are again on the rise in Ethiopia – and some of the violence associated with it is taking place in areas where major industrial parks that focus on the manufacture of textiles and apparel are located.

On 9 April employers in the Hawassa Industrial Park (HIP) - the main home to PVH's and H&M production in Ethiopia - decided to close their manufacturing facilities early due to massive (peaceful) protests by the Sidama movement that is demanding demanding a referendum on self determination.  A similar protest was held on 21 February 2019 to demand the Southern Nations, Nationalities, & Peoples' Region (SNNPR) be granted an autonomous status (
SEE HERE >>).  In 2018, the Ethiopian President pledged the demand would be taken into consideration in accordance with the constitution; however, the process was since then delayed.  READ HERE >>
But not all protests have been peaceful.  In the last week  and a half political tensions have boiled over in the:
Southern Nations, Nationalities, & Peoples' Region:  A bout of “ethnic” violence broke out in some of the SNNPR’s more rural areas resulting in a number of deaths and scores more being wounded as a result of clashes between rival militias and paramilitary forces.
Amhara Region:  People protested in Debre Berhan (Amhara region) to denounce recent violent incidents in the cities of Ataye, Dessie, and Kombolcha.  Sources indicated that members of the Oromo Liberation Front (OLF) group attacked the abovementioned cities on 6-7 April.  At least four people were reportedly killed in the violence.  Further such protests and violence are possible in the coming days and weeks. 

Will these political disputes impact upon textile and apparel production?  My guess is that they will - the peacful deminstartions in the Hawassa area which resulted in the closure of the HIP shows that they are.  A full day's production will now have to be made-up at overtime rates; perhaps some delivery dates will be missed; expensive airfreight could be required.
The cities of Kombolcha and Debre Berhan both have industrial parks (IP) which are managed by the Industrial Parks Development Corporation (IPDC).  The Kombolcha IP was opened in July 2017 and is home to a number of textile, apparel and leather bag/purses companies (e.g. Trybus – a Texas headquartered clothing manufacturer, Pungkook – a Korean origin manufacturer of fashion bags / purses / etc, Saytex – cotton spinner, and, Carviso – a knit fabric company).  The Debre Berhan Industrial Park was inaugurated on 2 March 2019 and its understood that firms will soon start moving in.
In both Kombolcha and Hawassa there are also value chain factories situated outside of the industrial parks.
I was a trade unionist in apartheid and post-apartheid South Africa and I know how destructive turf battles between competing political formations can be on factory production.  The most destructive conflicts occurred between supporters of the African National Congress (ANC) and Gatsha Buthelezi’s Inkatha Freedom Party (IFP) in the KwaZulu-Natal province - mainly in the former apartheid bantustan industrial zones of Isithebe, Ezakheni (Ladysmith) and Madadeni (Newcastle); but also in Mooi River, and Hammarsdale.  In some of these conflicts pitched battles took place within textile factory premises – resulting in deaths; while there were many politically inspired general strikes which resulted in delayed production.
On 8th April 2019 I read the following:
“The Ethiopian government has instructed its military to use force to end the violence in the country’s north-west region of Amhara following deadly attacks during the weekend, state media said.
“The powerful Ethiopia National Security Council … issued orders for the federal and regional security forces in the Amhara state to take “proportionate” action after local Amhara militia men attacks claimed lives and caused property damage.” 
As a South African who lived through multiple states of emergency and huge violence that spilled over into factories – I can, unfortunately, see where this is going! 

The H&M 2018 "Sustainability Report" states: "In Ethiopia, the Government has not ratified the ILO Minimum Wage and has not set a minimum legal wage for the private sector.  In 2018, together with the ILO we have engaged with the Ethiopian Government to advocate for a minimum wage-setting mechanism for the textile industry.  Although we believe this process might take a long time, we are fully committed to support the ILO driven agenda."  READ HERE >>

H&M must know that a minimum wage is something that is not going to be agreed to by the government of Ethiopia any time soon ... or if the Ethiopian government does agree to a minimum wage it will be set at a derisory level.

Of course, there would be nothing to stop H&M working with other apparel brands and retailers buying garments in Ethiopia working with their manufacturing vendors and a representative trade union to develop a non-statutory centralised bargaining forum in some Industrial Parks that will set minimum wages for workers in that park.  Other companies could then agree to follow that minimum wage, or not.

H&M's 2018 "Sustainability Report" (SEE HERE >>) gives more details as to the steps the retailer took in the aftermath of the substantial criticism it attracted after it published an advert of a black child wearing a hoodie with the slogan  "The Coolest Monkey in the Jungle".  The H&M report states:
"An important step in implementing our strategy was the roll-out of a new training programme on inclusion, diversity and unconscious bias, which raises awareness and helps us shape our goals, as well as identify improvement areas.  Several markets, including South Africa and USA, have teamed up with external partners to customise their own training on inclusion and diversity." ... " we partnered with the Institute for Justice & Reconciliation in South Africa to conduct internal training for the South African organisation."

H&M has responded well to the criticism levelled at it.  Many other South African companies should consider making diversity training compulsory for all staff.

Last week (2 April 2019) this blog / newsletter ran with a mini piece on H&M and its decision to source garments made in South Africa.  It decided to source locally in order to assuage criticism of its racist hoodie.  Tucked away in the H&M 2018 annual report (SEE >>) is the amount of stock in trade inventory that H&M is holding globally - SEK40bn (US$4.3bn).  READ HERE >>

Source: Bloomberg

I guess when they entered the SA market that the last thing that H&M would have thought was that they would be sourcing from the country.  For H&M, supplying South Africa would most probably have been something that they wanted to do using the massive global mountain of stock that they are holding. 

However, as I stated in the last blog/newsletter, I do not believe that it is going to be buying much from South Africa.  Neither is the process of sourcing locally going to be quick.  Not only does H&M have to fully land their regional sourcing person (the employment advert only appeared in February 2019); then this person will have to scout possible manufacturing vendors; then H&M will have to bring in their social compliance personnel to audit possible factories against their minimum labour standards.  Only then may orders be placed – tech-packs … pricing agreed … fabrics will then have to be procured … etc.  Not something that can happen overnight.

Nonetheless perhaps H&M is painting itself into a corner on this - for at some point in time in the future they will be asked to give an indication of how many garments they are buying that have been made in South Africa!   The answer they give will be an interesting one.

H&M FOUNDATION’S SUSTAINABILITY KENYAN WINNER, 4 April 2019 Lab-made vegan leather, textile fibers made of nettles, a digital system to make products recyclable from scratch, children's clothes that expand and a biodegradable toxic-free membrane for outdoor wear are this year's Global Change Award (SEE >> and SEE >>) winners, sharing a €1m grant from the non-profit H&M Foundation (SEE >>).  Their common denominator?  Improving fashion's impact on the planet through innovation.

One of the winners was Kenyan based Green Nettle Textile which won a grant of €150,000.  This enterprise uses stinging nettles to make a sustainable linen-like fabric; while process leftovers can be used to make paper and dyes.

I recognise that ‘H&M the retailer’ and the ‘H&M Foundation’ are separate entities.  The H&M Foundation is a non-profit global foundation, privately funded by the Stefan Persson family who are the founders and main owners of H&M group.  The Foundation’s mission is to drive long-lasting positive change and improve living conditions by investing in people, communities and innovative ideas.  However, this award made me think.  Laudable efforts “YES” … but the irony does spring to mind when considering H&M’s Ethiopia sourcing project – where there are significant social and environmental issues.

The Ethiopian Investment Commission (EIC - SEE >>) and The Children’s Place (TCP - SEE >>), a major united States apparel retailer, have partnered in hosting a "Vendor Summit" in Addis Ababa.  Apparently the Summit brought together over 40 TCP vendor companies who are considering investing in Ethiopia.

TCP does not reveal who their manufacturing vendors are, but it is known that they are most probably already sourcing garments from Ethiopia (as they have been advertising for staff in the country for some time).  Its known that they currently source garments from Egypt and from Lesotho.  I wonder if TCP will try to encourage some of existing African vendors to relocate to Ethiopia?

The Vagmi Cotton's Limited (SEE >>) is set to invest US$7m into a ginning operation in Zambia in 2019.  The Indian company targets to generate 8,000 tonnes of cotton lint in the current year.  The company claims to have already acquired land of around 26-acre in Zambia's Mwembeshi in Chibombo district.  The company has a plan to evolve from cotton ginning to a complete textile in the next year.  According to the CEO, the company is currently in talks with Indo-Zambia Bank to ensure possibilities of a joint venture or leasing the defunct Kafue Textiles Company.  READ HERE >>

Apparently!  I guess we may see the gin ... but the textile mill ... well lets see?

Kafue Textiles used to make “chitenge” fabrics – but reorientated its production away from this to produce greige fabrics for exports.  However, by the late 1990s had accumulated ZMK41bn in debt and production ground to a halt. In 2001 Kafue Textile Zambia was re-advertised for sale.  It later became African Textiles, but this plant ceased operations too.   It is assumed that there is no machinery in the former Kafue Textiles that is worthwhile saving – its most probably scrap!

As part of the process of developing a Responsible Mohair Standard (RMS), Mohair South Africa invited Textile Exchange and brand representatives from Filippa K and Textile Exchange member brands Acne and John Lewis & Partners to join a field trip to learn about the mohair supply chain in South Africa.  The trip explored each stage of the mohair value chain with a particular focus on visiting farms and meeting with farmers to better understand how animal welfare and land health is managed and how the draft Responsible Mohair Standard could be applied.
“It was very encouraging to see that Mohair South Africa and the farms are working hard towards a responsible mohair standard. Knowing that all the farms have been audited, and that the next step is a third party accreditation, will bring us closer to a sustainable supply chain.”  Doreen Chiang, Filippa K.

“The passion and commitment at every stage of the mohair supply chain, from the farmers and their families through to the people working in the brokers, processing plants and spinners was very clear to see.  The vet who supports farmers in adopting best practices in animal welfare was very impressive and it was invaluable to get his views and input into the draft Responsible Mohair Standard.  John Lewis and Partners works to ensure that the highest standards of animal welfare are achieved and that is why we are proud to be involved with Mohair South Africa and the Textile Exchange in the development of the new RMS (Responsible Mohair Standard).” Karen Perry, Partner & Sustainability Manager- Raw Materials, John Lewis & Partners.  Source:
Textile Exchange, April 2019 Newsletter

This is a good move by Mohair South Africa.  However, the organisation need to do loads more work to undo the damage as a consequence of the abuse of goats on some mohair South African goat farms.  Visiting select farms where angelic farmers reside, and getting positive publicity from the Textile Exchange, is not going to make global apparel brands and retailers change their views of South African mohair.  The problem needs to be fixed.
In 2018 abuse of mohair goats on some South African farms was exposed by the People for the Ethical Treatment of Animals (PETA) organization 
READ HERE >>.  Subsequent to the expose PETA alleges that more than 300 retailers / brands have said that they would phase out / ban mohair products.
I wonder if the R76m (US$5.4m) spent by South Africa’s sustainable cotton cluster (funded by South African taxpayers) on developing traceability software - which appears not to be used by many in the retail-cotton-spinning-textile pipeline – will be something that will be adopted by South African mohair farmers (with support from the taxpayer funded mohair cluster)?   But more on this gigantic waste of taxpayer money in future editions of this blog / newsletter – tough questions will be put to this cluster’s apex administrator – the Industrial Development Corporation of South Africa (IDC). 
PS: ironically it looks like the successor to the sustainable cotton cluster and the mohair cluster share the same office in Stellenbosch in South Africa.

The European Union (EU) commissioner for international cooperation and development visited Eritrea, launching an initial US$22.69m project for road connections between the Ethiopian border and Eritrean ports.  READ HERE >>

Once the road is complete and if the Eritrean ports are fit for purpose this will certainly help Ethiopian garment manufacturers based in the Tigray and Amhara regions of the country – especially those in located in the Industrial Parks of Mekelle and Bahir Dar.

Kitui residents now have a reason to smile following a directive by President Uhuru Kenyatta that all uniforms for chiefs and their assistants across the country will be produced by Kitui County Textile Centre (KICOTEC).  KICOTEC, which started operations in October 2018, will employ over 600 people.  Most of the fabric will, apparently, will be produced in Kenya.  READ HERE >>

Last week this blog/newsletter (“African Cotton, Textiles & Apparel Monitor” No.9 of 2 April 2019) ran with an article relating to Kenya’s Interior Cabinet Secretary announcing that in future all government agencies would now be required to procure their uniforms from the Nairobi garment manufacturing facility controlled by the National Youth Service (SEE >>).  Now this announcement by President Kenyatta.

Of course, many will recognise that there is often a vast chasm between what a Kenyan President says will happen … and what actually happens in reality.  On 1 May 2018, the Kenyatta announced a 5% increase to the country’s minimum wage affecting garment workers – but the decree was only implemented in mid-January 2019 when the wage increase should have come through on 1 May!  At one stage the Kenyan president backed the EAC banning imports of worn clothing; but Kenya was the first EAC member state to abandon the ban when the US growled. 

The increase “localisation of garments” tenders is most probably going to be a significant part of the policies that various EAC Member State Governments use to further develop their own textile and apparel sectors.  First, there will be the commitments that the state will only buy locally made textile, apparel and footwear products; then, I predict, the governments will start to make demands of the private sector (e.g. you got a state license to mine in our country then you must buy locally produced workwear that your workers will use).

To me it would make sense that some development project assists the EAC and each Member state government’s textile, apparel, home-textile and apparel procurement systems to develop coherent policy frameworks that ensure that expensive sourcing errors are not made; that each state gets cost-effective quality products; and, that graft is not part of the system.  Each EAC state must realise that they cannot all make all the products that their own governments need.

Cotton Council of Malawi has revealed that the recent heavy rains that hit the country have not affected the quantity and quality of cotton crops.  The Executive Director of the Cotton Council of Malawi indicated that it was only in the Makhanga area that was negatively affected by the rain.  He said: “The rains did not have much effect on the quality of cotton crops because it was under the ball formation stage; while this time around the crops has started bursting out and if rains may come, the quality of the crop will be compromised.”  READ HERE >>

The Cotton Company of Zimbabwe (COTTCO) has scooped the ‘Most Improved National Exporter of the Year Award’, thanks to the Presidential free inputs scheme which boosted the growing of the white gold.  Cotton used to be the second largest foreign currency earner after tobacco, but the cash crop nosedived as most farmers abandoned growing it owing to poor prices.  The white gold is however back on track with the biggest producer, COTTCO winning the Zimbabwe National Chamber of Commerce award.  “This is a result of the government intervention through the Presidential inputs scheme.  Remember since its launch, production shot up from 10,000 tonnes in 2015 to about 140,000 tones this season.  So credit also goes to the management at COTTCO which implemented the scheme successfully,” noted Zimbabwe Cotton Marketers Association.  READ HERE >>

It has been reported that there has been a strike at Firemount Textiles by workers protesting against poor working conditions. Apparently, some of the migrant workers were dismissed and are returning home to Madagascar.  READ HERE >>

For the marketing year (MY) 2019/20 (August to July) area for Senegal, Burkina Faso and Mali is forecast at 1.56m hectares, a 12% increase from the previous year on the expectation that strong fixed farm gate prices and low input prices (subsidised by the government) may incentivise farmers to plant more cotton.  In the MY 2019/20 total cotton production for all three countries is projected to increase 17% from the previous year at 2.83m 480 lb. bales assuming good weather and low pest pressure.  For MY 2019/20 total exports are estimated at 2.79m 480 lb. bales on expectations of strong international demand.  READ HERE >>

The Federal Government has sealed a US$280,000 technical assistant financing pact with the Islamic Development Bank for Nigeria’s textile industry.  The agreement was signed at the 44th ISDB Group Annual Meeting held in Marrakesh, Morocco with the theme, “Transformation in a Fast-changing world: The road to Sustainable Development Goals.”  The Federal Ministry of Industry, Trade & Investment will manage the cotton, textile and garment value chain development programme interventions.  READ HERE >>

In the good days, the textile industries in Kaduna State accounted for the lion share of direct and indirect labour in the state. It had an estimated workforce of over 500,000 people, possibly the largest in Northern Nigeria during the era.  The first textile industry in Northern Nigeria was established by the premiere of the region, the late Sir Ahmadu Bello, Sardauna Sokoto in 1957.  The establishment of the Kaduna Textiles Limited (KTL) gave birth to similar firms in Kaduna, Kano, Funtua and Gusau.  To meet the demand for their products, the companies operated on a shift basis, thereby providing jobs for more Nigerians.  Over time, these hitherto flourishing industries began to pack up one after the other.  Some of the reasons adduced for the sad development were lack of regular power supply, massive importation of textile materials, poor patronage of local fabrics and lack of support from the government.  READ HERE >>

Singapore headquartered Olam will donate US$250,000 to fund relief and victim support in Mozambique. The money will be used to provide food, building materials, household essentials and sanitation provisions, as the risk of disease outbreaks grows. The company will also leverage its on-the-ground presence and network to deliver support, coordinating with the government and humanitarian partners, including the Red Cross and the UN World Food Programme.  READ HERE >>


The US government wants to ensure that foreign firms that enjoy preferential access to its economy as a consequence of preferential trade arrangements do not abuse the trade rules of origin contained in the trade preferences extended.

To this end, it has established a unit in its Customs & Border Protection (CBP) agency – the Textile Production Verification Team (TPVT) – to ensure there is compliance.

TPVT responsibilities include determining:
  • whether a factory manufactured goods, as claimed
  • if the apparel or textile goods meet the requirements under the relevant trade preference program.
CBP’s TPVT sends personnel to textile factories in foreign countries to verify compliance of imported shipments claiming preferential duty treatment.  They are mainly focused on illegal transhipment – a company claiming they made the goods, but instead, the company imported fully made-up goods and re-labled them and exported them to the US.

The TPVT office has recently released a mini report, for the period 1 October 2017 to 30 September 2018, to US industry stakeholders (including the American Apparel & Footwear Association (AAFA) and the US Fashion Industry Association).  READ HERE >>

The CBP report included an overview of firm compliance with: the African Growth & Opportunity Act (AGOA), the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA), the United States - Peru Trade Promotion Agreement (Peru TPA), and the United States-Colombia Trade Promotion Agreement (Colombia TPA).

Their mini 2018 report noted related to Sub-Saharan African states:

I have seen some of these TPVT country reports.  They are thorough and comprehensive.  African states that want to limit textile and apparel smuggling – especially via other African states abusing the trade rules of origin in the various trade preference agreements - are advised to learn something from this US unit.

I predict that unless strong trade rules of origin verification procedures, and associated rules of origin dispute settlement mechanisms, are written into the both the Tripartite Free Trade Area (involving COMESA, the EAC and SADC) and the African Continental Free Trade Area agreement (involving 49 African states) that many African textile and apparel industries will downsize as a consequence of transshipment of fully made up goods.  South Africa's manufacturing industry will be one of the biggest losers.

South African, Lesotho and eSwatini/Swazi stakeholders in the textile and apparel pipeline should request some technical assistance from the the CBP's TPVT.


Chinese Manufacturing Investments and Knowledge Transfer: A Report from Ethiopia”.  Xiaoyang, Tang.  Working Paper No. 2019/3.  China Africa Research Initiative, School of Advanced International Studies, Johns Hopkins University, Washington DC, United States.  March 2019.
Synopsis: The uniqueness and diversity of socio-economic conditions in Africa call for a careful case-by-case examination to understand the real impacts of FDI on knowledge development.  This study aims to shed light on the knowledge transfer effects of Chinese investment in Africa’s manufacturing sector with a concrete case study of Ethiopia.  The paper examines knowledge transfer mechanisms between Chinese investments and Ethiopian firms, institutions, and individuals at four different levels in the manufacturing sector.  The lessons learned from this case may provide insights into China-African cooperation and Africa’s development process in general.  The full Working Paper can be  READ HERE >>  and the summary Policy Brief can be  READ HERE >>.

Overview of the Cotton, Textile and Apparel Sectors in East Africa Region (Kenya, Uganda, Tanzania, Ethiopia, Madagascar and Mauritius) and Benchmarking with Sri Lanka and Bangladesh”.  USAID East Africa Trade & Investment Hub (EATIH) - a program implemented by DAI Global LLC. Nairobi, Kenya.  April 2019.
Synopsis:  The report is the result of a study project with two main objectives.  The first was to collect and provide easily searchable and mapped information on sector players that could be used to identify textile, apparel and apparel accessory producers who can supply products to local and regional clients and US buyers and participate in Hub-sponsored activities.  The second objective was to benchmark the business climate for apparel-related trade and investment in six East African countries (Kenya, Uganda, Tanzania, Madagascar, Mauritius and Ethiopia) against two global apparel producing competitors in Asia – Sri Lanka and Bangladesh – to provide a basis for the selection of suitable sourcing and investment for local and global buyers as well as policy improvements and interventions by East African governments.  The full paper can be READ HERE >>.

The intention behind the report is great - the USAID Southern Africa Trade & Investment Hub (SATIH) should consider something similar.

Its good to see that a development project is now attempting (although this exercise has its own problems) to make available the factory profiles that its own consultants have collected using taxpayer donor resources.  For too long have I seen independent consultants on various development projects collecting detailed factory information and then the project contractor does not force them to share this data - sometimes these firm profiles become a ticket for their next consultancy gig, or are used exclusively for garment sourcing businesses.

Some observations on the EATIH report:
  • much of the trade data is old (for 2016) - providing EAC Member States’ export trade data for 2017 and part of 2018 would have been possible.
  • much of the data (especially for apparel) is at a macro level (HS61 and 62 have even been combined) … which is fine – but a wealth of HS6-8 digit trade data exists.  It would have been easy to further break up the trade data for HS Chapters 61-62 to HS6-8 digit level and this would have given potential buyers a much clearer overview of what EAC member state firms make and then export
  • its unclear as to how old the benchmarking data is related to the cost of the factors of production (wages paid, utility costs, typical rentals, etc.). Information on minimum wages is given – which one assumes is a general worker (i.e. labourer) minimum wage.  It would have been much better if the minimum wage (a typical salary for Ethiopia as no minimum wages exist) applicable to a sewing machinist had been given as this is the main occupation in the garment industry.
  • the database of 68 mapped textile and apparel producers from five East African countries (Kenya, Uganda, Tanzania, Mauritius and Madagascar) is not available – the link to www.textilemap.co.ke does not work!  The EATIH's Chief of Party has indicated that they pulled down the database for improvements.  He stated that data can be found on the EATIH website in a temporary location.  SEE >>   It is worthwhile pointing out that the EATIH temporary database only contains a listing of 25 enterprises.  Furthermore.  When the database eventually goes live it is suggested that those interested should download the information as soon as possible for the DAI Inc contract to run USAID's EATIH expires in about September 2019 and the data base could then disappear from cyberspace,

In the past couple of editions of the "African Cotton, Textiles & Apparel Monitor"  the wages paid to textile and garment workers in Ethiopia has been covered.  This got me thinking ... its not often ... I know!  In order to compare one country's minimum wages with that of another its useful to compare like with like.  In some country's the working week is longer (it has more hours) than in other countries; wages sometimes include employers discretionary payments; etc.

In my view a grander research exercise is needed - perhaps funded by a consortium of donors who are already putting resources into Africa's textile and apparel industries:  perhaps the World Bank / IFC, UNCTAD, UNIDO, the EU, USAID, DFID, Gatsby Africa, GIZ, and the IADC could all contribute and a single set of consultants could be engaged to undertake a signgle benchmarking project.

It would be useful if an independent research exercise was undertaken that would enable a comparison of the minimum wages paid to qualified garment sewing machinists (who would typically constitute about 70-80% of the average garment factory’s workforce) in different African countries. Where minimum wages are not set - then typical average wages paid could be recorded.

Initially, the wages paid in the following African countries could be compared:  in East Africa: Ethiopia, Kenya, Tanzania, Mauritius and Madagascar;  in Southern Africa: South Africa, Lesotho and eSwatini/Swaziland;  in West Africa: Ghana and Nigeria;  and, in North Africa: Morocco, and Egypt.

Funds permitting a comparison with Asian powerhouses of Bangladesh, Cambodia, Myanmar and Vietnam could also be included.

Such a comparison would look at the minimum wages paid - reduced to an hourly rate to allow for easy nation-to-nation comparison - as per statute; and, perhaps, by collective agreement.

The exercise would need to footnote if provisions exist, and which may frequently be used, that allow for exemptions from paying the minimum wage.

This data would be the minimum required – for it is with this take-home pay that workers have to maintain themselves and their families.  It would exclude all sorts of other payments employers include in workers’ compensation, such as: attendance bonuses, productivity payments, etc.

The exercise may also footnote other costs to employers.  For example:
  • statutory payments that may have to be made related to employer contributions to unemployment funds, industry training bodies, medical and retirement funds, to maintain centralised bargaining institutions, deferred severance benefits, etc.
  • compulsory (often in-kind) payments for food, transport and accommodation, etc.
  • the number of days paid: sick leave, annual leave, family responsibility leave (such as for maternity/paternity), public holidays.

Of course, it is easy to see that low wages are important – but how competitive are Africa factories?  How good is an African sewing machinist?  How competent are the senior (both local and expatriate) managers that have been engaged to run plants and act as supervisory personnel?

In this context, it would be useful – especially for a sample of firms - to undertake a thorough analysis of the productivity of some SSA garment plants.

This audit should look at the management of all sections of a factory including: stock/inventory, the cutting room, the sewing floor, the finishing area, and packing/dispatch.  A critical common denominator indicator would be the amount of time it takes to stitch a defined garment (perhaps a pair of denim jeans and a t-shirt – for in most African countries the manufacture of jeans is a key component of their clothing manufacturing industries).

In my view it is improved firm competitiveness that is key - with better skilled senior and middle management firms may be able adequately compete without having to resort to sweating labour, or asking governments for more incentives, or having to rely on trade preference programmes.

In any competitiveness improvement programme implemented there needs to be sophisticated mechanisms whereby workers can share in the gains accrued!  Crude piece rate systems simply do not cut it.  I have often seen worker's take home pay (using a piece rate system) being reduced because of management mistakes.

2014 - 2018
Some Comments & Observations
Its likely that east African trade into places like Canada is effectively based on the back of orders placed by big US apparel brands and retailers who are already exporting the same products into the US.
But the statics reveal something worrying:  There is an extreme reliance on the part of many east African nations on the United States’ apparel market place.  AGOA is going to expire in September 2025.  Are east African garment manufacturers in Ethiopia, Kenya and Tanzania hoping that the US will extend AGOA?  I think this is unlikely since the US has indicated that it wants to negotiate a reciprocal preferential trade deal to replace AGOA.
The EAC and the Ethiopian government needs to develop a proper strategy to get their producers to export more of their product into the EU and EFTA member states.
The EAC also need to look at other markets – including Australia, Canada, New Zealand, South Africa, and some of the states of the Arabian gulf.
Of course, the EAC needs to figure out how they can encourage more verticality – not having to rely on the import of fabrics and garment trims – as this will ensure continued firm survival as trade preferences get eroded.  As a priority it will need to develop rational strategies to encourage firms to become competitive.
Minimum wages have been justified on moral, social, and economic grounds.  But the overarching objective is to boost incomes and improve the welfare of workers at the low end of the ladder, while also reducing inequality and promoting social inclusiveness.  Critics counter that rather than improving welfare, minimum wages are counterproductive because they disrupt the market for labour.  They argue that there are other, better-targeted, and less distortionary ways to provide social assistance.

The International Trade Union Confederation's (ITUC) response can be READ HERE >>.

The OAR directory is an open source (i.e. FREE) map and database of global apparel manufacturing facilities.  It has a number of african manufacturers listed.  To access the data base SEE HERE >>

  • Global Supply Chain Labour Challenges - Ethiopia & Bangladesh - Workshop - 14 May 2019.  Copenhagen, Denmark.   The "NYU Stern Center for Business & Human Rights" will examine global supply chain labour challenges facing garment brands sourcing in emerging markets, with a particular focus on Bangladesh and Ethiopia.  The panel will draw on the original research that has been undertaken over the last five years by the Center.  It will address the broader political and social content in these countries and the associated risk to global brands.  It will also focus on best practices relating to purchasing practices, factory safety issues, managing sub-contracting relationships and other topical issues and explore lessons learned in Bangladesh and how these lessons can be applied in frontier markets like Ethiopia. Register by contacting:  vanderso@stern.nyu.edu
  • 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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