20 of 2016

Newsletter No. 20   17 June 2016

Zimbabwe govt framing bill for Bulawayo textile SEZ 

Zimbabhe government of Zimbabwe is framing a Special Economic Zone (SEZ) Bill to pave way for making Bulawayo city a SEZ for clothing and textiles, local media has reported.

The aim of the SEZ is not only to revive old companies, but also to attract new investment into the sector, according to Confederation of Zimbabwe Industries.

The setting up of SEZ would create jobs in textiles, clothing and leather sector. It is also expected to increase cotton growing around Bulawayo, attracting ginners, weavers and spinners.

It is estimated that over 20,000 workers have become jobless during the past few years as more than 100 companies, including those in the manufacturing, textile and clothing sectors, have closed down.

Companies like Ascot Clothing, National Blankets and Archer Clothing are among those that have either stopped functioning or have been down-sized leaving many people unemployed.

Use of outdated technologies was one of the reasons for these textile and clothing companies being unable to thrive, as it made difficult for them to compete with products from Asian countries. Moreover, power outages also affected production efficiency. (RKS)

Fibre2Fashion

The textile and clothing trade in Botswana, Lesotho, Namibia and Swaziland (BLNS)

Outside of South Africa there is little traditional manufacturing capacity in Sub-Saharan Africa that is able to make an impact in global export markets. Perhaps the only sector that has consistently performed at this level is the textile and clothing (TC) sector, but even here its performance has been for the most part modest. South Africa has, in recent years, adopted protectionist measures in the form of quotas on Chinese imports and increased tariffs to the WTO bound rate of 45%, but this has done little to revive the South African productive sector. What has been more significant has been the performance of the smaller BLNS countries of Lesotho, in particular, and Swaziland as they react to preferential access into the increasingly protected South African market.

The objective for this paper* is to assess the trade profile of the TC sector in the BLNS countries over the last six years, with this six year period chosen as reliable BLNS trade data is not readily available prior to that time. The data is sourced from the International Trade Centre (ITC) and expressed in US dollars using both direct trade data as supplied by the country itself or mirror data as assessed by trading partners.

Since 2001 SACU’s share of the global narrower clothing (excluding textiles at this stage) export market (including intra-SACU exports) has varied from a low of 0.17 % during 2005 following a high of 0.53% in 2003. Over the last few years this global share has stabilised at around 0.20%. While this may seem a reasonable contribution to a vast market, further examination shows that around 60% of this is intra-SACU exporting and a very large % of the remainder is to the single US market. It is on this ‘outside’ market of the US that export attention is focussed, and here we find that the contribution is now almost entirely from Lesotho under the tariff preferences of the Africa Growth and Opportunity Act (AGOA). It is also disconcerting to learn that even though the US is the major ‘outside’ export market for not only SACU but also the nascent sub-Saharan countries the total combined sub Saharan share of the US market is lower than Cambodia’s and of course significantly lower than China’s.

Despite South African endeavours to protect its clothing market its imports have been stable in recent years, while those for both Lesotho and Swaziland are increasing. China is the main supplier to South Africa, with intra-SACU imports stable at around one quarter of the total South African imports in recent years.

The paper then turns to an analysis of the TC trade profiles for the BLNS countries. Data is presented at the aggregated HS 2 Chapters and examined by both import sources and export destinations for each country. As there are data limitations for the BLNS countries we often use both direct data as presented from the respective countries themselves and ITC mirror data as assessed from trading partners to give an up-to-data but not necessarily complete picture. Limited effort is made to reconcile trade data between partners as this has proved to be an exercise fraught with difficulties in Africa! We also note in our classifications that HS 63 is reported somewhat misleadingly as ‘worn clothing’ in the Chapter heading but it in fact includes a very eclectic mix of products from rugs and blankets to sacks and bags for packaging goods as well as the minor category of worn clothing.

A striking feature of the BLNS trade is that there is very limited intra-BLNS trade in any direction.

This Trade Brief was prepared during the tralac Geek Week of 11-15 April 2016. The authors are Maria Immanuel, Trade and Investment Analyst at the Namibia Trade Forum, and Ron Sandrey, tralac Associate.

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Did you Know…….

  • Marilyn Monroe wore a designer dress made of 6000 rhinestones when she sang Happy Birthday to JFK at Madison Square Garden in 1962. This fabulous designer evening dress fetched $1.26 million in 1999 at a Christie’s auction. Whowy!! What amazing fashion facts!
  • Did you know Barbie has been dressed by designers such as Givenchy, Christian Louboutin, Versace, Dolce & Gabana, Vera Wang and Gucci? Lucky girl!! So there is one girl with more shoes than you! Barbie doll has more than a billion pair of shoes by designers and she had over one hundred new additions to her wardrobe per year!

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