Uganda debates over future of garment sector

20 Jan '12

2 min read

The opening of a retail store of a top foreign brand in the country has given rise to a debate over the future of Uganda's garment industry.

Woolworths, one of South Africa's top retailers known for high-quality and stylish clothing, has opened its first outlet in Uganda – the biggest till date outside South Africa.

The opening of Woolworths' outlet in Naalya was preceded by the launch of a Mr Price (South African firm) store and outlets of some Kenyan companies.

Woolworths said they decided to open their outlet in Uganda, as its economy is growing very fast and retail trade is also booming.

This has made Ugandan garment makers worried as the once thriving garment sector in the country is already on the verge of collapse and recently a well-known company, Nyanza textile, went out of business.

Ugandan garment makers are concerned that the entry of the likes of Woolworths would hurt other domestic firms engaged in the sector.

Some experts, however, say that the entry of foreign retailers would result in more tax collection for the Government and would also inspire domestic companies to produce good quality products that meet global standards.

They suggest that the overseas retail firms can be lured to shift their manufacturing base to Uganda instead of importing the garment pieces from other countries to sell in their Ugandan stores. This may boost employment in the country.

Among disadvantages, they say, the international companies may pose a threat to some local firms that do not have the means to invest and upgrade their production to meet global standards, and they could be forced to close their businesses.

However, analysts do not foresee any direct competition between Woolworths and local garment traders immediately as their customer groups are different.

Experts are of the opinion that the Government should support local garment manufacturers to enhance the quality of their products. They say the Government can provide easy access to credit, irrigation facilities and electricity at lower costs, in addition to helping them in acquiring quality materials and hiring skilled manpower.

Fibre2fashion News Desk - India