West Africa Textiles and Garments Focus Report

Published on 15th June 2021

History of Cotton Activity

In order to study the current state and future opportunities of the textile industry in West Africa, the history of its primary input – cotton – must be understood. Africa produces roughly 100 species of cotton and hosts six cotton-growing basins, the largest of which is in West Africa. There are 12 cotton-producing countries in the region, namely Benin, Burkina Faso, Cameroon, the Central African Republic, Chad, Côte d’Ivoire, Ghana, Mali, Niger, Nigeria, Senegal and Togo, which produce approximately 75% of the continent’s cotton. Benin, Côte d’Ivoire and Burkina Faso have been the top-producing countries in recent years, occupying, respectively, sixth, seventh and eighth place globally for countries who earned the most from cotton exports in 2019, according to UN trade data.

The current picture was not always the case, however. Commercial cotton production in West Africa got its start in the late 1800s when Britain and France turned to their African colonies to source cotton amid the rapid development of the European textile industry, and supplement supply from India and the US. Planting trials took place in various parts of the region throughout the following decades. In the early 1960s, when most of the 12 countries gained independence, West Africa produced only 15% of cotton on the continent; development began in earnest in the 1970s, particularly among francophone nations. That decade saw parastatal companies formed to oversee the growing and marketing of cotton in countries including Chad, Cameroon, Senegal, Côte d’Ivoire, Togo, Burkina Faso and Mali, with heavy involvement from Geocoton, formerly known as the French Company for the Development of Textile Fibres. Governments still have a large presence in cotton operations in Frenchspeaking West Africa, while the approach is more hands-off in anglophone nations such as Nigeria. Between 1960 and the early 2000s annual cotton production in West Africa grew from approximately 100,000 tonnes to 1m tonnes, according to data from the OECD and ECOWAS.

Textile Value Chain

The basic steps of the value chain for creating new textiles from natural fibre have remained largely the same over the past century, and most often begins with seed cotton production: cotton accounts for roughly two-thirds of all natural material used for fabric globally, with wool, silk, hemp, cashmere, and other plant and animal fibres making up the remainder. The cotton is collected from fields and distributed to factories at home or abroad, ginned into lint, spun into yarn, woven into greige fabric, dyed or printed and sewn into a finished garment. It is then transported to the consumer market – whether in the same country or via exports – and sold in wholesale or retail environments.

In current-day West Africa the majority of activity is concentrated on the first and second step of the value chain, with a smaller emphasis on creating yarn. However, while the participation of West African countries in the manufacture of textiles largely ends with the export of raw cotton – particularly to factories in China, Bangladesh, Vietnam and Malaysia – there is momentum in the region to establish more mills and, ultimately, to produce finished clothing and industrial textiles on a broad scale. Indeed, West African markets have found themselves in the position of exporting lowervalue spun or unspun cotton only to import finished textiles at higher prices. Investing in infrastructure that can transform local raw materials into finished products for domestic and export markets would strengthen West African economies and help to combat the influx of articles from Asia.

The industrial rise of China, in particular, has had a profound impact on the textile industry in other nations, and West African countries are no exception. However, as labour costs in China rise and diplomatic tensions between the country and the US – which is a major source of clothing demand – continue, West Africa is well positioned to grow its textile industry due to relatively lower wages and proximity to abundant raw material. The latter is an especially important factor to ensure that finished products are competitively priced, since little transport between fields and factories would be needed, boosting the competitiveness of the region’s textiles in the global garment trade.

Sustainable Inputs

With West Africa serving as a major centre of cotton production, the region follows demand trends and has made certain adjustments in line with consumer expectations. Consumers around the world, and especially those in developed economies, are becoming more environmentally conscious and increasingly seek to purchase items that are natural and sustainably made. After decades of steady growth in synthetic fibres, which are made from petrochemicals, imports of synthetic apparel to the US surpassed cotton articles for the first time in 2014. However, growing awareness of the negative environmental impact of oil activity is supporting renewed demand for cotton as a natural, hypoallergenic and breathable material. Specifically, demand for organic cotton grown in a sustainable and fair manner is a trend that West African producers are looking to capitalise on.

 In 2005 the Hamburg-based Aid by Trade Foundation launched the Cotton made in Africa (CmiA) initiative to sell sustainably produced cotton and improve the standard of living of farmers. CmiA has grown into an internationally recognised label of quality, environmental friendliness and fair treatment. As of April 2021 roughly 1m smallholder farmers across 10 countries were active in the initiative, including growers in Benin and Burkina Faso. The total amount of CmiA cotton that had been ginned as of that date was 630,000 tonnes. The network includes 217 spinning mills and fabric producers, and in 2020 some 276m articles of clothing with the CmiA label were sent to market. Overall, one-third of cotton grown across the continent is CmiA-verified.

In the organic cotton segment, Burkina Faso inaugurated the region’s first organic cotton ginning plant at the end of January 2020 – about 15 years after organic cotton was first commercially grown in the country. The 5000-sqmetre facility was created with a direct investment of around CFA4bn and is operated by the Organic Cotton Ginning Company. It has a ginning capacity of 17,500 tonnes of cotton seed per season, or 125 tonnes per day. Employing around 40 permanent workers and 200 seasonal staff, the plant is also helping to combat youth and female unemployment in the area.

Supply Hurdles and Opportunities

When it comes to finished articles, West Africa is up against large volumes of imported secondhand clothing or smuggled substandard fabrics. Commercial trade in used clothing from Europe and the US began in the 1990s due to growing demand for Western fashion from African markets. Spurred on by the fast fashion industry and overbuying in developed countries, donated or discarded articles are often purchased at low prices by intermediaries and exported to local traders in emerging economies around the world. This, coupled with the influx of relatively cheap garments from China and other Asian nations, has slowly taken its toll on a once vibrant West African textile industry that is now struggling to compete.

One opportunity, however, is the local manufacturing of African wax prints: 100% cotton fabric in colourful patterns. As West Africans wear this fabric for a variety of occasions – from work, to weddings and funerals – the market is large. The material is gaining popularity beyond the region as well, including in European high fashion. The majority of African wax print is currently made in the Netherlands – an industry that dates back to the late 1800s – and exported to West Africa. Traders sell the bulk fabric as a luxury product and local tailors create finished articles requested by clients. Since the turn of the century, however, lower-quality fabric – often with imitation designs – has increasingly been coming from China, India and other Asian markets, often costing up to 10 times less than European-made fabric.

Regional production of wax print, which is currently limited to Ghana and Côte d’Ivoire, presents a significant opportunity for job creation and export earnings, particularly if the fabrics are sold to the US under the preferential African Growth and Opportunity Act by eligible countries (see Facts and Figures). Investors seeking to gain a foothold in the West African textile industry can look to wax print to capture advantages at both ends of the value chain – through abundant cotton supply and a large consumer market – while minimising risk and cost from transportation.

Goals, Programmes and Initiatives

At a September 2020 virtual meeting held by the Accra-headquartered West Africa Competitiveness Programme (WACOMP) – created as a partnership between the EU and ECOWAS – the textile and garment industry value chain was highlighted as a key part of economic development in the region, especially in the wake of the Covid-19 pandemic, in the context of ECOWAS’ efforts to revitalise the region’s economy. Group members noted that a lack of recent investment in West Africa, in addition to increased global competition, had led to a decline in the region’s once-thriving textile and garment industry; the programme aims to support value chains at the regional and the national level to accelerate sector transformation, improve competitiveness, create jobs, and facilitate access to local and global markets. Furthermore, over the 2021-22 period WACOMP – in partnership with the International Trade Centre (ITC) and the UN Industrial Development Organisation – is hosting a series of business-tobusiness matchmaking events called West Africa Connect, which will focus on textile and garment value chains, among other strategic sectors, with the aim of promoting local enterprises at the regional and the international level.

Capacity-building activity is also taking place at the national level. In an effort to enhance local textile production capacity, for example, the Nigerian government established the N100bn Cotton, Textile and Garment Fund in 2009. In 2020 the Central Bank of Nigeria announced it had invested a further N120bn in the fund, which has so far benefitted some 320,000 farmers and allowed the sector to develop significantly. In other moves, the government imposed a 10% levy in order to combat a rise in textiles imported to the country.

In Côte d’Ivoire, meanwhile, the government has supported the sector by providing farming resources such as fertiliser to cotton farmers; introducing a national pricing scheme; and implementing capacity-building programmes to encourage higher productivity, which have led to a greater contribution of the industry to GDP. Other West African nations have enacted innovative strategies to promote their local textile and garment sectors. In Ghana, for example – where the government has highlighted the textile industry as one for strategic investment under its 10-Point Industrial Transformation Agenda introduced in 2017 – various partnerships between the private sector and international stakeholders, including the German development agency, GIZ, are under way to strengthen the sector and increase cost-effectiveness, in addition to promoting social and environmental responsibility.

Textile and Garment Exports

International demand for textiles from the continent – and West Africa specifically – has grown significantly in recent years; African garment patterns have gained worldwide recognition, and West African influences are incorporated more into fashion houses and collections.

The region has become a notable exporter of cotton. Between 2000/01 and 2004/05 West Africa exported an average of almost 1m tonnes of cotton fibre, or 13% of global production, making it the third-largest exporter of the material, behind the US with 2.5m tonnes (37%) and Central Asia with 1.2m tonnes (17%). With an annual average growth rate of almost 6% in 1960, the speed at which West African cotton exports developed was unmatched, except by Australia, who registered nearly 11%.

Currently, the EU is West Africa’s largest trade partner – thanks to preferential market access agreements – and the primary export market for West African ready-made, transformed products, which include textiles and garments.

West Africa is the world’s sixth-largest grower of cotton, with approximately 90% of the raw product exported to South and South-east Asia for spinning and weaving into finished goods. Meanwhile, 2% of raw cotton is processed locally in the region, highlighting significant opportunities for regional industrial development.

The largest export markets for cotton are Bangladesh, accounting for 34.1% of exports; Vietnam, with 17.2%; China, with 11.8%; Indonesia, with 7.4%; Egypt, with 6.6%; Turkey, with 4.7%; Thailand, with 2.7%; India, with 2.5%; Singapore, with 2.3%; and Switzerland, with 2.1%.

According a report published by the US Department of Agriculture in May 2021, Benin, Mali, Côte d’Ivoire and Burkina Faso are among the top-10 largest cotton-exporting countries in the world. Together, these four countries exported 3.7m bales of the product in the 2016/17 harvest; 4.2m bales in 2017/18; 4.4m bales in 2018/19; 3.9m bales in 2019/20; and 3.8m bales in 2020/21.

The AfCFTA and the Garment Sector

Spearheaded by the African Union (AU), the African Continental Free Trade Area (AfCFTA) agreement was signed in March 2018 and aims to substantially reduce both tariff and non-tariff barriers to trade.

The new trading agreement came into effect on January 1, 2021, connecting 1.3bn people under a single market valued at $3.4trn, which, according to the World Bank, could increase Africa’s exports by $560bn and lift more than 30m people out of extreme poverty. Furthermore, according to figures from the Brookings Institution, a US think tank, the implementation of the agreement has the potential to double the size of the manufacturing industry, creating 13m-16m new jobs and helping to bridge the employment gap.

 In regards to the textile and garment sector, African policymakers are looking to lower the cost, and enhance the production and distribution of clothes through liberalised tariffs, with the goal of attracting new investment and creating more competition. Sourcing more textiles from local suppliers is expected to lead to the formation of regional textilemanufacturing clusters and attract more foreign direct investment.

African member countries hope that the reduction and elimination of tariffs on 90% of goods traded within the AfCTFA will unlock market potential for the region’s textile companies and create more integrated global supply chains, similar to the AGOA. The AGOA is a piece of US legislation that allows sub-Saharan African countries to export duty-free to the US as long as they meet a list of requirements, including establishing market-based economies and policies to reduce poverty and protect human rights, which resulted in significant growth in apparel exports. Moreover, anticipated regional growth also means a growing consumer market, bolstered by Africa’s rising middle and upper classes and their preferences for luxury brands, apparel and fast-moving consumer goods.

However, a number of challenges must be overcome before the textile and garment sector can realise its full potential in West Africa. “The two most critical issues facing the development of a longterm textile industry in West Africa are affordable electricity and qualified human resources. Energy in Africa is expensive; a cost-effective industry would need to pay at most $0.10 per KWh for electricity to be competitive in the global market,” Jacky Riviere, manager of ARISE Chad and Togo, told OBG. “Second, to create viable levels of added value and develop a textile brand, West Africa must upskill its workforce and create an attractive environment for cotton industry workers to forge their careers and specialise.”

Courtesy: Oxford Business Group

Oxford Business Group (OBG) is a global research and advisory company with a presence in over 30 countries, spanning Africa, the Middle East, Asia and the Americas.

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