Africa has the potential to export €5.8 billion of cotton garments to both international and intra-African markets by 2026, according to a new report by the International Trade Centre, which identifies cotton apparel as a promising value chain.
The continent is an important producer and exporter of raw cotton and is involved in the final assembly of certain textiles. However, the region has relatively few spinning mills and limited yarn and fabric production, leading to a lack of vertical value chain integration. Little refinement of cotton happens in Africa. The continent exports 90% of its raw cotton to Asia and is a net importer of cotton fabrics and yarn. African cotton apparel manufacturers import a mere 7% of cotton yarn and 6% of cotton fabric from elsewhere on the continent.
Export potential in cotton garments could increase significantly if intermediate steps in the value chain – such as processing of cotton into yarn and fabric – were carried out on the continent. This presents strategic investment opportunities with a view of diversifying production locations and near-shoring close to major markets, e.g. the EU, to reduce the risk of supply-chain disruptions.
The report states there is significant intra-regional export potential to untap. African clothing producers tend to focus on their domestic markets or manufacture apparel for brands outside the continent. Many fail to realise opportunities for intra-regional trade due to limited awareness of, and participation in, market linkage activities such as trade fairs. There is also little awareness of intra-African trade accords, such as the African Continental Free Trade Area, and their possible advantages.
Business voice: Reviving Angola’s clothing and textiles industry
In Angola, fashion entrepreneur Daniel Pires has high ambitions for Angola’s garment industry. From his base in Luanda, he is working to develop a clothing factory using exclusively African inputs and original local designs.
“We want to build a solid local value chain,” he says. “We have good fashion stylists in Angola, and we have found high-quality suppliers in Africa. We are negotiating with Ugandan organic cotton producers and other African garment, yarn and textiles suppliers.”
It hasn’t been easy, especially with many countries still struggling to recover from the pandemic. The sluggish economic recovery has slowed talks with potential investors, says Pires, who envisions his factory eventually producing a million garments a year. “Today, even the samakaka, a traditional Angolan fabric, is produced outside the country due to the absence of factories to do it here. This reality must change,” he says.
Pires says his plant on the outskirts of Luanda will start to produce 100% ‘made in Africa’ t-shirts and polo shirts by the end of the year.
But his plans don’t stop there. Pires eventually hopes to succeed on a national scale by building a network of 18 clothing factories, using Angolan cotton and locally produced fabrics. Developing the capacity of the workforce is crucial for the sustainable future of the textile industry – and the success of his factory network – so he plans to offer training for workers and potential managers
One reason Angola has few textile plants is that local banks are reluctant to offer credit to small entrepreneurs, Pires says. “Even with a solid business plan, it is very difficult to access financing and investment,” he explains. “It is also extremely difficult to meet collateral requirements. Unfortunately, there is a lack of credit policies for small companies and family-owned businesses.”
Angola used to be one of the biggest cotton producers in Africa. The country’s cotton fields were devastated during its decades-long civil war and today, its textile and apparel industry depends largely on raw materials from Asia or Europe.
Yet the textile industry is experiencing something of a rebirth. Three textile factories have an installed capacity to produce more than 10 million metres of fabric and 18 million garments per year, and the Angolan government is working to attract private investment to the sector.
These three plants produce tablecloths, sheets, pants, shirts and, especially, uniforms for the government.