Extension of AGOA provision to boost Botswana garments

10 Aug '12

2 min read

The US’s decision to extend the third-country fabric (TCF) provision under the African Growth and Opportunities Act (AGOA) till September 2015 is expected to provide the much needed boost for revival of the Botswana textile and apparel industry, which has been paralysed this year.

The TCF provision allows African apparel producers to duty-free export to the US apparels produced in sub-Saharan African countries using third-country fabric or from fabric originally sourced from a third-world country, with no compulsion to use fabric produced in or procured from any AGOA beneficiary nation or from the US.

In Botswana, over the years, the number of AGOA textile and garment exporters has reduced to just one, and if the provision would have expired, it would have had a disastrous effect on the industry, which is already facing other challenges like dearth of skilled workforce.

The only AGOA textile and clothing exporter of Botswana cut 500 jobs in May this year, stating that no new orders are coming from the US as buyers are now eyeing other markets for their purchases.

Prior to the recent extension of the TCF, US data depicted a 35 percent fall in orders from Africa for period after September 30, 2012, when the TCF provision was earlier scheduled to end.

Under AGOA, Botswana firms exported goods worth US$ 15.5 million or P 115 million to the US during 2011, which is significantly more than 2010 and 2009’s exports worth P 86 million and P 92 million, respectively.

Fibre2fashion News Desk - India