TID plans reviving textile & clothing sector

03 Jul '08

2 min read

The Trade and Industry Department (TID) of South Africa has decided to implement a comprehensive action plan to recapitalize and upgrade the clothing and textile industry which has the potential to fetch a considerable amount of revenues and attract foreign direct investments.

The department plans to set about with broadening incentives for the textile and garment sector for bringing it back on its feet. This will include a productivity-linked incentive program which will substitute the export-based Duty Credit Certificate Scheme.

Additionally, an incentive for capital upgrading through development program for small businesses is also being considered for re-launch as the Enterprise Incentive Program. Presently, the existing incentive offered by the Government is the export based scheme but since there are only a handful of manufacturers competitive enough to make voluminous exports, tradability of the credit certificates have been a major problem.

The Industrial Development Corporation is expected to play an important role in funding sector recapitalization. Moreover, the Government is also planning to boost research and development funding for the industry, upgrading skills and stepping up integration.

Initiatives have also been taken to improve clothing industry competitiveness by means of reviewing import duties on textiles in November. This revision will aim at removing flaws in tariff schemes. While duties on fabric not produced in Southern African Customs Union will be completely eliminated, the ones on textiles not produced in sufficient quantities will be examined further scope of reduction in tariff.