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Tuesday, 06 August 2019 12:42

Sourcing from Africa poses challenges

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Sub Saharan Africa is widely regarded as a growing apparel-sourcing destination but the region faces serious challenges. Apparel has become one of the top exports for many sub Saharan African countries under the African Growth and Opportunity Act (AGOA). This is a trade preference program devised by the US in 2000 to help developing African countries grow their economy through expanded exports to the United States. It allows these countries duty-free apparel exports to the US. However most sub Saharan African countries still have no capacity in producing capital and technology-intensive textile products.

Theoretically, as a country’s economy advances, it should gradually be producing and exporting more capital and technology-intensive textiles versus labor-intensive apparel products. Ideally, as an economy becomes more sophisticated, textiles and apparel should account for a declining share in a country’s total merchandise exports. However, in some sub Saharan African countries textiles and apparel account for over 80 per cent of their total merchandise exports. In fact these countries import more apparel than they export, a phenomenon rarely seen among developing countries in a similar stage of economic development.

Lesotho, Kenya, and Mauritius are the top three largest apparel exporters in sub Saharan Africa. Over 96 per cent of their exports go to the United States and the EU.