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US Apparel Imports from Sub-Saharan Africa Falling in 2005

US Apparel Imports from Sub-Saharan Africa Falling in 2005

Write: Elia [2011-05-20]

Statistical data from the US Department of Commerce reveal declining imports from Sub-Saharan Africa in the first seven months of the year.

Overall volume of exports to the US from the countries forming the African Growth and Opportunity Act (AGOA) which allows duty-free US access, totaled 220.2 million square meters equivalent by the end of July 2005.

The total value of the exports for African producers was worth $836.2 million.

The bulk of apparel production favoured cotton garments but had fallen in volume terms by 11 per cent compared to the seven months to July in 2004.

The largest categories of cotton apparel in 339 (knit shirts), 341 (non-knit shirts) and 348 (women's trousers) have, so far this year, failed to make any real impact on US importers.

Over 85 per cent of Sub-Saharan apparel manufacturing is concentrated in the hands of around five countries: Kenya, Mauritius, Madagascar, South Africa and Lesotho.

Moreover, these five main AGOA textile and apparel producers have all subsequently weakened on the US import market.

The strongest exporter to the US, Mauritius, has seen the total value of it shipments decline in value month-by-month and is down over $30 million from the same point last year.

AGOA countries are allowed to export to the US duty-free and part of the arrangement allows Africa to use fabrics from third countries (non-AGOA countries) in the manufacture of garments.

The provision will last until the end of September 2007 after being extended for three years in 2004.

This had the intention of benefiting the domestic industry but has, in fact, had a double-edged sword effect on local industry.

African countries have become reliant on outside fabrics, especially from Asia, thus not encouraging internal investment in the domestic textile industry.

Countries such as Lesotho have, however, succeeded in attracting South African investment in the past and continues to see investment in the form of Taiwanese firms setting up there.

But with Chinese competition tempting US importers ever more since the end of world quotas this year, Lesotho and other African nations have seen their textile and apparel industries decline as a result.

A recent report by the United States International Trade Commission (USITC) commented on the difficulties faced by Sub-Saharan apparel and textile producers that were constraining the sector.

The document stated amongst these problems were:

1) Shortage of raw materials and textile inputs

2) High production costs relative to Asia

3) Obsolete equipment

4) Capacity being underused

These, the report believes, are the main contributing factors behind Sub-Sahara's export difficulties where it accounts for around just one per cent of world textile and apparel exports.

Currency factors have also hampered export drives especially in Lesotho and Swaziland which have currencies pegged to the South African Rand.

The strength of the Rand relative to the US dollar has weakened competitiveness for textile and apparel manufacturers in these countries.