Ursula Schmeling-Brinkmann
A Hazardous Venture - The Textile Industry in Sub-Saharan Africa

In the struggle for foreign capital, the states of Sub-Saharan Africa have engaged in a relentless contest. Dusty investment codes are being pulled out of drawers and polished up to a bright new lustre. Lower taxes, generous exemption from customs duties, free trade zones and cheap labour are meant to attract investors from Europe, Asia and America in order to, at last, speed up the industrialisation of these countries. Employment must be created because the large number of unemployed and underemployed is increasingly endangering peace on this continent. Yet the success of the steps which have been taken is mediocre.

The textile industry is one sector of the economy which is at the centre of interest. The production of yarn, fabrics and ready-to-wear clothes, particularly from local cotton has a long tradition in Sub-Saharan Africa, above all in West Africa. Arabian travel reports from the 9th century already refer to guild-like spinning and weaving communities, as well as to busy trading in materials. While during the colonial period textile production was,for the most part,forbidden and Sub-Saharan Africa was reduced to being producers of raw materials, in the meantime every country has again a more of less well functioning textile industry - cotton mills, "Pagne" weaving mills, production firms for traditional clothing and European fashion.

This concerns mainly small firms and a few, mostly, state-owned,large-scale enterprises which can often only survive behind high tariff barriers. Medium-sized firms exist hardly anywhere.

Most markets in Sub-Saharan Africa are small in terms of purchasing power, even in the case of a large population. Legal exports to neighbouring countries are, in the main, unpracticable; the bureaucratic obstacles insurmountable; smuggling flourishes. Changes in state price formation, but also legal and illegal imports often alter,overnight, the basis of existence of this industry. In this way, cheap imports from other West African countries and illegal imports have reduced the textile industry in Cote d'Ivoire to almost nothing. As the textile industry, after the end of the colonial period was built up mainly with the aim of import substitution, it is extremely difficult to achieve export orientation on the lucrative first and second world markets. The reduction of import duties helps, but is not sufficient. As a result, individual countries are seeking to win investors from abroad for the establishment of new export-orientated plants. Creative fashion firms which exist, for example, in Hong Kong, remain elusive in most countries.

Mauritius, often called "Africa's Hong Kong", is one of the success stories in the textile sector. With textiles produced in the free trade zones, the island has advanced to being the second largest exporter of pullovers in the world and the third largest exporter of knitwear. In the case of knitwear with the wool seal, the small island is even the leader on the world market. The textile industry with about 600 firms is foreign-exchange earner number one. Full employment and a standard of living which lies well above the African average are the results of a successful economic policy. Moreover, Mauritius is smaller than Luxemburg and has no notable raw material reserves. Despite an investment promotion agreement and a double taxation agreement, the Federal Republic of Germany is only represented by 12 textile firms ( material for shirts, men's outerwear, knitwear ). Other projects are,however, being negotiated. The largest German investor is the firm Corona. But also Boss, Betty Barclay and many department stores have the cutting and knitting done here. As a result of full employment and rising wage levels, employers in Mauritius are increasingly gambling on the use of modern labour-saving computer steered weaving and knitting machines,are trying to enter higher-priced markets and develop their own trademarks. Nevertheless, there are still sweat shops here too, in which barely 14 year old girls weave by hand, elbow to elbow, to booming music.

One of the countries which is also gambling on the systematic expansion of its textile industry, with foreign assistance, is Madagascar. Here the attempt was started, with a completely out-of-date investment law and the creation of industrial free zones, to outdo the successful neighbour Mauritius. Income tax in the free trade zones was fixed at 10% and thereby 5% less than in Mauritius. With the equivalent of DM 45 per month, Madagascan workers are cheaper than their colleagues in Mauritius.

Amongst the first parties to knock on the door of the Madagascan authorities were, of all people, Mauritian entrepreneurs who find here, more and also cheaper workers. At the same time, it opened up a new possibility for Mauritius to explore other industrial areas in order to reduce dependency in its own free zones on the unbridled growth of the textile industry. But French firms also showed initial interest in establishing manufacturing plants in Madagascar.

With the aim of producing thousands of new jobs, Togo also began to establish an investors paradise. Foreign entrepreneurs, who export 80% of their production, should remain spared from the tax man for ten years. From the eleventh year onwards, a reduced tax rate of 11% lies waiting for them. Pinpointed areas are the textile sector - for the processing of local cotton - the electrical engineering industry and the production of tools.

Kenya is also involved in the competition to produce the best investment conditions, a country which was, for a long time, regarded as an exemplary country, but which in recent years has become subject to increasing criticism. Due to low wage levels, even a few Mauritian textile firms have moved to Kenya.

Zimbabwe, which has, for several years, successfully exported textiles to the United Kingdom and the USA, has also achieved export success in the Federal Republic of Germany as a result of joint venture production of sports clothes.

Swaziland, favoured by its proximity to the large South African market, has also succeeded in building up an export orientated textile industry on a small-scale.

In Nigeria, the approved programme of structural adjustment has, until now, had substantial effects upon the textile industry there. Pressure to force the processing of local raw materials has led textile firms to invest large sums of money in cotton plantations. The export efforts of the industry have resulted in a situation where, if Nigeria were to close its borders, a shortage of textiles would arise in many neighbouring West African countries; a situation which would be difficult to overcome. The quality of goods is, in the meantime, so good, the success for example on the US market so great, that Congress last year considered whether or not quotas should be introduced for the import of Nigerian textiles. It is difficult to compute the actual scale of exports as the export trade is inadequately organised and smuggling plays an enormous role.

The collapse of the Ets. R. Gonfreville (ERG) textile mill, founded in 1932 in Cote d'Ivoire, the oldest textile firm in francophone Africa and until recently the largest textile producer in Africa, shows clearly the problems facing the textile industry in Sub-Saharan Africa. These problems can, however, scarcely be eliminated by the recently introduced measures for privatisation and the reduction of the workforce to 10 per cent.

The main obstacles for the establishment of an export orientated textile industry are investment costs in Sub-Saharan Africa, which according to experts lie 50 to 100% above those in comparable regions in South East Asia. Bad infrastructure, high transport costs within the countries and to Europe, an unreliable supply of water and electricity and a non-functioning telecommunications system, act as a deterrent to potential investors. While low wage and salary costs are attractive, another picture often evolves when wage levels are placed in relation to labour productivity. For in Africa this is, with the exception of Mauritius, considerably lower than,for example, in Asia. At the beginning of the 80's, wages in most African countries were higher than those in South East Asia and were "only adjusted downwards" as a result of devaluations. An additional factor is the lacking qualification of the majority of workers, who must first of all be trained. It is not possible, in all countries, to succeed in introducing incentive pay. Without a qualified European plant manager,accepted by the local workforce, and a European quality controller, nothing works. Often lacking for joint ventures, favoured by many governments, are solvent, financially strong local partners, who are not solely interested in making quick money but rather in long-term industrial projects. Problems also arise with raw materials because locally produced cotton does not always meet the requirements. In Ghana, where attempts are being made to build up a textile industry, already since the middle of the eighties, about 90% of the raw materials must be imported from abroad. Individual textile firms have, in the meantime, started to cultivate their own acreages. The government is promoting, in particular, the cultivation of cotton by small farmers. In Nigeria, the textile industry has also committed itself to the cultivation of cotton. In Mali, the European Investment Bank has made a considerable amount of funds available for the construction of another ginning plant and for the modernisation of existing plants in order to improve fibre quality. In Kenya, silk production by small farmers is,since very recently, being promoted.

Where in addition to these problems, investment protection and double taxation agreements do not exist (e.g. Kenya), German industry and institutions involved in development aid are extremely reticent to become involved. The textile industry is the lowest point of entry into the industrial age.

Women mainly find jobs in the textile industry. While mostly "only" in the lower wage brackets, nevertheless in countries with a real and a hidden rate of unemployment of up to 50 per cent, every job is better than none. In addition, having one's own wage strengthens the self-assurance and the position of a woman in the family. This can lead to family tensions, particularly in Moslem countries, but has a mainly positive effect on women. The textile industry opens up training and additional training as well as chances for promotion from overseer to quality controller up to manager and designer; chances which women would, perhaps, not otherwise have. Through working with high technology machinery, the possibility is also increasingly opened for women to change to other better paid branches like electrical engineering and electronics.

In order to overcome unemployment, womens' groups are increasingly turning to production cooperatives and are being supported by various western development organisations. Employment leads to social and political changes which can only be welcomed.

© Friedrich Ebert Stiftung | technical support | net edition fes-bibliothek

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