Several Trade Incentives Available to The African Countries Including AGOA

Several trade incentives available to the African countries including, African Growth and Opportunity Act (AGOA), the Cotonou Agreement with the European Union, and the Southern African Customs Union (SACU) agreement, help in the revival of the African textile and apparel industry.
 
The textile and apparel industry in Sub-Saharan Africa has high potential for investments mainly due to the duty free access to the traditional markets such as the US and the EU, according to industry representatives.
 
In a conversation with fibre2fashion, Mr. Rajeev Arora, executive director of African Cotton & Textiles Industries Federation, said, “There are several openings for investors to get involved in spinning, weaving, knitting, dyeing and finishing. This is in spite of the fact that many Sub-Sahara African states can use third country fabrics to make garments that they export to the US and the EU.”
 
“Similarly, there are also opportunities to locate apparel manufacturing plants in selected Sub-Sahara African states,” he adds.
 
A recent research report by the Botswana Institute for Development Policy Analysis (BIDPA) states “Botswana’s textile and garment industry has benefitted from trade preferences and it did not perform well after the financial crisis in the US and the EU.”
 
Botswana established the textile and clothing industry during the period 1980-90 and the sector expanded rapidly as a result of the trade preferences available to it under the Southern African Customs Union (SACU) agreement, the Cotonou Agreement and the African Growth and Opportunity Act (AGOA).
 
The textile and garment sector of Botswana grew by making use of a number of policies including protective tariffs, quotas and export incentives. Furthermore, the preferential trade regimes put in place by the US, the EU and SACU were crucial to the economic growth and development of the country, the research report says.
 
According to the International Manufacturers Federation, the total apparel exports from Africa under the duty free quota free exports to the US in 2012 were about US$ 2 billion.
 
The official statistics from the US Department of Commerce states that Sub-Sahara African countries, including Lesotho, Mauritius and Kenya, exported textiles and garments worth US$ 815.310 million under AGOA in 2012.