End of AGOA provision may trouble Botswana garment sector

30 Apr '12

2 min read

The garment and textile sector in southern African country of Botswana may be in trouble if the third-country fabric provision under the African Growth Opportunities Act (AGOA) does not get extension beyond its scheduled expiry in September, 2012.

In 2009, when the Botswana garment and textile industry faced slowdown due to worldwide economic recession, the number of people employed in the sector decreased from around 6,000 to 2,000.

Subsequently, the Government introduced a two-year P38 million package for the apparel and textile industry to preserve jobs and to improve cash flows of the participating companies.

The scheme resulted in increasing the number of jobs again to near 6,000 level and the country's apparel and textile sector profitability returned to pre-recession levels by the end of January, 2012.

The Government's revival package ended in December, 2011. This, along with the forthcoming end of third-country fabric provision under AGOA, is crippling the Botswana apparel and textile industry once again.

The Botswana clothing and textile sector imports most of its raw materials from Asian countries, where the quantities and qualities are better compared to those available in the African region.

Boniface Mphetlhe, Botswana Deputy Permanent Secretary of Trade, said the Government is aware that the end of revival package to the garment and textile industry has created problems for the sector and those businesses that were revived due to the package are now facing shutdown.

Carapparel Botswana, which employs around 1,500 people, has already announced that if things do not improve, it would be forced to cut down its employee strength to 1,000 by next month.

Fibre2fashion News Desk - India