Will new federation improve the fortunes of textiles industry?

Monday May 3 2010

Africa currently produces 12 per cent of the world’s cotton. Photo/FILE

Africa currently produces 12 per cent of the world’s cotton. Photo/FILE  

By SCOLA KAMAU

The launch of the African Cotton Industries Federation (ACTIF) in Nairobi by 23 trade associations from 18 African countries has brought high expectations to the industry that pressing problems of production, processing and marketing will finally be addressed.

The federation is the first pan-African cotton body and is meant to translate the disparate policies of the cotton, textile and apparel sectors into cohesive positions at regional and international trade development forums.

Kenya, Uganda and Tanzania are among the 18 member countries of ACTIF.

The organisation will also promote the industry as a major revenue earner in East Africa and the continent.

Africa currently produces 12 per cent of the world’s cotton but more than 95 per cent of it is sold either to other countries in the continent or outside before it is processed.

The remaining 5 per cent is processed within the growing countries.

A value added strategy in Africa would give the industry a boost, which is what ACTIF advocates for.

The federation aims at creating a unified voice in both regional and global trade affairs to provide effective regional representation at international fora, build co-operation, interaction, linkages, and promote inter-regional trade.

This includes further negotiations with the US on the Africa Growth and Opportunity Act (Agoa) to ensure its continuation in Africa to secure investment in the entire value chain, maintain existing buyers and attract new markets.

According to ACTIF chairman Jaswinder Bedi, Agoa’s 2015 deadline to wind up the initiative should be pushed forward to enable the business continue.

“We want Agoa to be more permanent to safeguard Africa’s market,” said Mr Bedi.

He said a crisis could hit Agoa-eligible countries, with buyers looking elsewhere for apparel.

According to the Global and Regional Trends in Textile Fibre Consumption, March 2010 edition, Asia was by far the largest consumer of fibres in 2008, having accounted for 73.2 per cent of global usage, while Africa was ranked seventh and Oceania and Central America trailing with 1.5 per cent and 0.1 per cent respectively.

In Africa, fibre consumption fell by a marginal 0.5 per cent in 2008.

The result was an 11 per cent rise in man-made fibre consumption, offset by a 10.6 per cent drop in cotton production.

On the other hand, Africa is looking at regions-based trade as an alternative in case the international market soars.

“There has been a global drop in apparel exports to the US because of the economic crisis. It is better to concentrate on regional markets like the EAC and Comesa. It is now easier because we have improved our quality of apparels,” said Suzan Muhwezi, Uganda’s presidential advisor on Agoa.

According to the Uganda Export Promotion Board, cotton export revenues dropped from $50 million in 2004/5 financial year to $38 million in 2007/8.

At the same time, figures show a declining trend in production of cotton seeds from 94,000 tonnes in 2002 to 39,000 tonnes in 2008.

ACTIF campaigns for private sector involvement in regional policy formulation and implementation, since a strong private sector and political stability would attract more markets.

John Heagreaves, Madagascar’s assistant chair, Textiles and Approved Exporters Association, explained that it was due to political instability that the country lost close to 130,000 jobs when exports to the US market were terminated.

“They include 30,000 direct and almost 100,000 indirect jobs.”

Imports of second-hand clothes to Africa have negatively affected the textile industry’s capacity for job creation.

They have led to the sourcing of fabrics from Asia and designs from Europe and the US.

If ACTIF’s vision to ensure that fabric, design and fashion needs are met locally from the continent comes to pass, the industry will redeem its past glory where most of the states’ demands were met by their own industries.

Limited government support has contributed to the dismal performance of the African cotton and textile industry.