Textile exports plunge 67 percent

MBONGENI MGUNI
Staff Writer | Wednesday March 20, 2013 00:00

 

Bank of Botswana figures released recently indicate that in 2012, textile exports averaged P152.4 million per quarter, swinging from a high of P330.4 million between January and March to a low of P79.3 million in the second quarter.

By comparison, 2011 textile exports powered home at P1.8 billion, averaging P454.4 million per quarter and ranging between P556.3 million to P335.3 million.The poorer 2012 figures comes as cabinet prepares to review a request by the textile sector for a fresh bailout of P500 million over five years. Between 2009 and 2011, government supported local textile manufacturers with a P38 million rescue package, which ultimately secured 5,591 citizen jobs.

Yesterday, industry analysts told Mmegi Business that the weak 2012 exports were in line with sector wide distress following the expiry of the first bailout, as well as uncertainty around the continuation of the African Growth and Opportunities Act (AGOA).

AGOA gives duty and quota free market access to the US for certain lines of goods from Botswana and 39 other African states. While the US Senate renewed a key AGOA provision allowing textile producers in Botswana and other countries to source fabric from non-AGOA members, orders dried up in the uncertainty that prevailed before the decision in September. Executives at Botswana's sole AGOA exporter, Carapparel Botswana, said despite last year's slump, prospects for this year are positive.

'This year will be much better than the last because buyers (in the US) understand the extension to the AGOA provision,' said the company's director, Sam Lin.'We are getting more orders than before and the buyers are coming back to source from Africa.' The country's sole textile exporter to the US is hopeful of a rosy 2013 and is recruiting 200 extra workers to boost production capacity.

Last May, Carapparel Botswana shed 500 jobs citing the expiry of the 2009 government bailout and drying up of AGOA orders. The loss of the jobs has come back to haunt the company as it is struggling to recruit qualified workers needed to satisfy the new orders.

'This year, we are looking at recruiting between 100 and 200 more people to boost the capacity, but the problem we are having is actually getting the people,' Lin told Mmegi Business.'Many retail malls have sprung up and it appears people prefer working there, than in the factories. They have given up the sector and believe the work is too heavy compared to the malls.' Once a leading employer, mainly of young unskilled female citizens, the textile sector began shedding jobs after 2008, when the global recession closed major markets.  The recession-led slump coincided with policy changes within the Southern African Customs Union (SACU), which eroded the competitiveness of local exports.

While the textile sector has a measure of support from the local market, exports are by far its biggest money-spinner.