South Africa is a well-positioned country to become a major supplier of clothing, textiles, footwear and leather to the continent. It has built the African Continental Free Trade Area as the foundation for long-term growth. The country’s apparel and the textile sector employed 200,000 people in 1987, mostly in Cape and Natal provinces. But by 2006, dozens of factories had closed, the workforce halved, and manufacturers were struggling as the market was flooded with cheap Asian imports. South Africa is no longer a competitive producer of textiles but has the potential in rebuilding it.
But now they are preparing for the post-COVID world, the South African government will strengthen efforts around reconstruction and recovery, including broader pacts with workers and businesses, focused on saving as many firms and jobs they also identifying new opportunities like embracing digital technologies to recover.
This was followed up by the commitments in August by President Cyril Ramaphosa, who said the government would “implement fiscal and economic reforms to raise confidence and grow the economy” as government debt grows to deal with the crisis.
South African clothing retailer The Foschini Group (TFG) has already implemented, benefitting its sales when Covid-19 struck and delayed competitor’s imports from China. TFG CEO Anthony Thunstrom says the company has already been reducing its reliance on Chinese supplies for several years.
Minister Ebrahim Patel said that the South African Department of Trade, Industry and Competition (DTIC) has unveiled four master plans, including one for the clothing and textiles industry and these master plans aiming to increase the country’s production and jobs.
This master plan was submitted to the department of trade and industry (DTI) in June to revive the ailing apparel and textile industry.
At the South Africa Investment Conference in Sandton in the master plan was signed by the government, labor unions, the Foschini Group, Pepkor, Edcon, Price and Woolworths and they are aiming to create 60,000 new jobs by 2030.
As per the master plan, the government has pledged to take decisive action against illegal imports and unions have bound themselves to adjustments in the employment environment, which would hopefully increase competitiveness. So, the South African Revenue Services (SARS) has started working and from July 2019, they have already seized 550 shipping containers.
So, the imports of clothing, textiles and leather goods have raised from just over US$5 billion in 2000 to almost US$60 billion now (according to Western Cape provincial minister).
To help the country clothing retailer Price Group announced it would spend an additional US$30 million. Another apparel and footwear manufacturing firm Africa Bespoke Apparel (ABA), announced for a big investment for the development and support of Govt. and ABA is a company fully Blacks owned firm.
An industry expert said that the government should stimulate local demand and grow South African manufacturing by making sure the ‘Buy Local’ campaign was everywhere and ever-present and urged South Africans to deliberately and consistently buy locally-made goods.
Export opportunities of South Africa
Government and industry officials are also eyeing potential export opportunities for the country’s clothing and textile industry, which could include easier access to the UK market after Britain abandons its final formal ties with the European Union from 1 January 2021.
They also hope that trade relations with the remaining 27 EU member states will improve. Intra-regional trade within the African Continental Free Trade Area (AFCFTA), supported by 54 out of 55 African countries, will commence early 2021.
Another potential growth area is integrating the talents of South Africa’s fashion designers with manufacturing. A recent study revealed a collaboration between the DTIC and the South African Sustainable Cotton Cluster (SCC), an industry grouping, can be a significant opportunity for local designers to establish ‘a meaningful presence’ in a global fashion market estimated at US$1.5 trillion.
Ramaphosa the President of South Africa addressed that “Supporting the young designers and design houses would be crucial to the success and development of the entire local industry”.
He also added that everyone should remember that reviving the sector is not meant to find the cheapest labor, but drive an intelligent and sustainable agenda to make consumers aware.
