2. Speaker Biographies
Lindsay Whitfield is a Professor of Business and Development in the Department of Management, Society and Communication at Copenhagen Business School in Denmark. She researches contemporary challenges to economic development through in-depth studies of firms and industries in the global south, focusing primarily on Sub-Saharan Africa. Her research is informed by economic history and development economics. Currently, she leads the research project Decent Work and Global Value Chain-based Industrialisation in Ethiopia (2020-2025). Lindsay is also part of a research project on the circular economy in Bangladesh’s Apparel Industry (2022-2027). She has published several books, including Economies after Colonialism: Ghana and the Struggle for Power (2018), The Politics of African Industrial Policy: A Comparative Perspective (2015), and The Politics of Aid: African Strategies for Dealing with Donors (2009).
Lilowtee Rajmun-Joosery is the Director of the Mauritius Exports Association (MEXA), one of the largest associations of regrouping exporting firms on the island. As the head of the MEXA, Lilowtee has participated in the formulation of numerous policies in the interest of the exporting community of Mauritius. She was appointed as Council Member in August 2018.
Patrick Anam is a Senior Trade Analyst at Development Reimagined. His work focuses on international trade law, trade policy, and regional integration. He was the lead author of the report by Development Reimagined titled, From China-Africa to Africa-China: A Blueprint for a Green and Inclusive Continent-Wide Strategy Towards China (2021).
Barnabus Jatau is the former Deputy Director of the Industrial Development Department at the Nigerian Federal Ministry of Industry, Trade, and Investment (FMITI). Barnabus retired from FMITI in 2021. During his tenure at the department he worked on developing programmes to grow identified subsectors according to Nigeria’s industrial revolution plan. This also included the monitoring and evaluation of industrial policies and programme impacts and sensitisation of industrial policy and programmes.
Michael Lawrence is the Executive Director of The National Clothing Retail Federation (NCRF) in South Africa. He represents the NCRF in various entities, including Business Unity South Africa (BUSA) and the National Economic and Development Council (NEDLAC). He holds a BSc from the University of Cape Town and has a wide range of entrepreneurial and operational experience.
Mathias Knappe is the Programme Manager and Head of the Fibres, Textiles and Clothing Sector and the Enterprise Competitiveness Division of Enterprise and Institutions (DEI) at the International Trade Centre. Mathias has over 25 years of diversified professional experience in international trade and development. He has worked at the enterprise, institutional, and governmental levels. Over the last 15 years, he has been working alongside the textiles and clothing sector globally to increase its export competitiveness. Understanding the needs of the market, he designed ITC’s Global Textiles and Clothing programme and created the ITC African Cotton Development Initiative.
Jane Ezirigwe is a Senior Research Fellow at the Nigerian Institute of Advanced Legal Studies (NIALS) where she focuses on Food & Agricultural Law, International Trade, and Gender & Development. She also teaches International Trade Law at Bingham University Karu, Nigeria. She holds a PhD in law from the University of Cape Town. Jane is a member of the African Continental Free Trade Area (AfCFTA) Advisory Council. She has contributed to several discussions on the AfCFTA and Food & Agricultural Law at national, continental, and international forums, and has received several academic and research awards for her contributions to law development in the sector.
Mohamed Ali is the Director of Trade and Competition at the AfCFTA Secretariat. Mohammed has contributed as a Senior Trade Official and the Deputy of the Chief Negotiator of Egypt since the commencement of the negotiations of the AfCFTA in 2015. In addition, he assisted in the establishment of a trade policy framework, which aimed to identify trade issues at a national level that could be mainstreamed into the development plans and
3 African textile manufacturing capabilities, investment & rules of origin (RoO) • SUMMARY REPORT
strategy for improving intra-Africa trade.
Phyllis Wakiaga is the Chief Executive of the Kenyan Association of Manufacturers. She is a legal professional who has worked for more than 15 years in organisational-strategy development and implementation, corporate governance, public-policy advocacy and formulation, legislative reform, stakeholder relations, human capital management, trade negotiations and sustainability. Phyllis is an Advocate of the High Court of Kenya and an alumna of the Swedish Institute Management Programme on Sustainable Business Leadership and Corporate Social Responsibility. She also chairs the Kenya chapter of the UN Global Compact Network and the Kenya Industrial Water Alliance, and she is a board member of the Kenya COVID-19 Fund.
Silvere Tovignan is the Regional Director for Africa at the Textile Exchange. Silvere has worked on sustainable cotton and textiles in Africa for over two decades. He is an Associate Professor of Agricultural Economics at the University of Parakou in Benin. Silvere’s
research activities inform small-scale organic cotton farmers about socio-economic wellbeing.
Nelson Ndirangu is the Chair of Trade Hub East Africa, where he leads a team of experts on International Trade Policy and Regional Integration focusing on Africa. He also is the Chairman of the Competition Authority of Kenya. Nelson has a keen interest in the legal and economic analysis of African multilateral, regional and bilateral trade relations. He has held various roles, including the Director General of Economic and Commercial Diplomacy at the Ministry of Foreign Affairs and International Trade in Kenya and the Chief Negotiator for Kenya at the World Trade Organisation. He was instrumental in guiding Kenya on international trade issues and was Chief Negotiator for Kenya on Tripartite Free Trade Area (TFTA)and AfCFTA until December 2017. Nelson has also worked as a consultant in various international and regional organisations.
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3. Thematic Outline
3.2 Country-level perspectives on the development of textile and apparel manufacturing in Africa
Barnabus Jatau and Lilowtee Rajmun Jooseery provided a country overview of the development and socio-economic importance of the textile and apparel sector in Nigeria and Mauritius, respectively. They outlined each country’s divergent experiences in developing textile and apparel production.
The development and advancement of Mauritius and Nigeria’s textile and apparel manufacturing sectors over the past five decades have taken different paths. Unlike Nigeria, Mauritius’ textile and apparel manufacturing capabilities are well developed, and this sector contributes significantly to the country’s growth domestic product (GDP) and directly employs approximately 35 000 people. Mauritius has a vertically integrated textiles and apparel sector, including spinning, knitting and apparel production. It imports cotton from East Africa and Madagascar and yarn and fabric from India and Pakistan.
Mauritius has increasingly exported textile products, supported by the African Growth and Opportunity Act (AGOA), and since 2000 the government has prioritised attracting Foreign Direct Investment (FDI) for textile spinning mills. Mauritian apparel-producing companies expanded their operations to Madagascar –making up around 50% of the country’s apparel exports. Mauritius’s apparel export market includes South Africa (the largest market), followed by the European Union (EU) and the United States of America (USA), respectively. The Mauritian government and private sector are keen to leverage the existing complementary relationship with Madagascar and other African countries to strengthen regional textile and apparel production.
Nigeria’s textile sector, on the other hand, has been debilitated, resulting in several textile mill closures, including Kaduna Textiles Ltd (KTL), one of the country’s oldest textile mills.1 Factory closures and the stymied development of the textile sector were a result of various factors, namely the adoption of the Structural Adjustment Programs (SAP) and economic deregulation and trade liberalisations, which began in the late 1990s resulting in an influx of cheap imports produced at one-third of the cost of local textiles. Additionally, the advancement of Nigeria’s textile sector has been hampered by infrastructural deficiencies such as electricity blackouts, the smuggling of textile materials and counterfeit goods,2 and the government’s failure to develop and implement policies that could strategically develop the sector.
Compared to other African countries (such as Madagascar and Ethiopia), Nigeria’s apparel production is neither highly organised nor is it a significant contributor to its GDP. Looking to Madagascar and Ethiopia as examples, the Nigerian government developed the National Cotton, Textile and Garment (NCTG) Policy, which was approved in 2015. The NCTG Policy was drafted to support the development of Nigeria’s cotton, textile, and apparel sectors by addressing the fundamental issues of local patronage, trade strategy, skills development, industrial parks, smuggling, financing and raw materials, amongst others. However, the policy framework has remained a draft document since 2015 and has, therefore, not been effective at raising the cotton production capacity of ginneries and textile companies within the country. Additionally, in 2021, the Central Bank of Nigeria committed to resuscitating the textile sector to enable the country to become self-sufficient in cotton production and, in doing so, create employment opportunities and upskill locals across the value chain. The Central Bank of Nigeria also committed to making provisions for developing industrial parks to house textile and apparel production. To this end, agreements have been signed with
5 African textile manufacturing capabilities, investment & rules of origin (RoO) • SUMMARY REPORT
1 KTL was established in 1957 and shutdown in 2007.
2 Because local textile materials and garments are expensive, cheap smuggled and counterfeit products are appealing alternatives for the public.
foreign multinational companies looking to establish operations in Nigeria’s proposed Integrated Textile and Garment Park in Funtua.3
Despite the current state of Mauritius and Nigeria’s textile and apparel sectors, there is a need for both countries’ governments and private sectors to focus efforts on attracting FDI to build a textile base and apparel production. Mauritius has focused on strengthening existing capabilities in supplying various textile products at varying price points. On the other hand, Nigeria has prioritised investment to rebuild its textile production and establish an organised apparel production sector.
Both speakers stressed that if AfCFTA member states are to leverage the continental trade agreement and develop a sustainable and competitive cotton, textiles, and apparel value chain in the African region, significant strategic investment in this sector is required across the continent.
3.2 Africa has the potential to develop textile production
Despite the limited textile production on the continent, several speakers – Lilowtee Rajmun-Joosery, Lindsay Whitfield, Silvere Tovingnan, and Michael Lawrence – discussed the following regional and global trends that support and indicate Africa’s potential to develop textile production. The primary points of the discussion are summarised below:
• Africa is one of the world’s largest cotton producers, and the continent needs to leverage this resource by attracting FDI into the beneficiation of cotton, including spinning and textile production.
• Global supply disruptions and the diversification of global production networks have resulted in buyers looking for alternative sources for apparel products and shifting to sourcing from Asia and Africa, specifically East Africa.
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3 In 2021, the Katsina state government offered the Nigeria Export Processing Zones Authority (NEPZA) over 270 hectares of land to set up a textile and garments park in Funtua. Funtua Integrated Textile and Garment Park is one of the six priority projects under the Nigeria Industrial Revolution Plan of the federal government.
• Globally, only a few buyers/retailers have undertaken a sustainability shift, however, this trend could become a norm over the next five to ten years. This shift will require a supplier base that can assist buyers/retailers in realising sustainable and circular economy business models. This allows African suppliers the opportunity to differentiate their textile and apparel value chains based on sustainable production, which could potentially be the continent’s competitive advantage – promoting African apparel and textiles as a sustainable production region.
• The sustainability shift has been driven by consumers from the Global North and not necessarily African consumers. However, despite this observation, the sustainability shift provides a technological opportunity to drive green industrialisation in Africa. Globally, the sixth techno-economic paradigm is unfolding based on eco-moderation, which will breed a range of technologies that will drive sectoral production while spilling over into other industries. Africa should not miss this technological shift, particularly in fibre production.4
3.3 How can textile and apparel production be developed on the continent?
One of the primary objectives of the AfCFTA is to promote industrialisation. Historically, textile and apparel production has supported the industrialisation of least-developed economies. Lindsay Whitfield argued that RoO alone cannot lead to the development of regional value chains. In addition, prioritising apparel production will not result in industrialisation. Rather, the focus needs to shift towards driving technological advances in the textile sector. Industrialisation and the creation of textile companies require scope and economies of scale, organisational capabilities, and the ability to create border linkages within the domestic economy, which is expected to result in spillovers into other industries and significant intra-industry linkages.
4 Technological change in fibre production capabilities, innovations, and investments will lead to the production/ development of organic cotton and cellulose alternatives, recycled raw materials and advanced fibre recycling technologies, waste management systems and technology in liquid and solid waste treatment, eco-industrial parks and industrial symbiosis; and green energy.
7 African textile manufacturing capabilities, investment & rules of origin (RoO) • SUMMARY REPORT
The development of textile and apparel manufacturing capabilities in other developing countries such as Sri Lanka, Mauritius, and Bangladesh are proof that RoO alone cannot lead to industrialisation. Instead, industrial policy interventions focused on sector upgrading and investments in backward and intra-firm linkages by the private and public sectors facilitated the textile and apparel sector development. Furthermore, the CTA value chains in these countries have been driven by the textile and technological advances within the industry and not the apparel sector. Additionally, investments in the aforementioned countries’ textile sectors and the type of products produced were determined in partnership with foreign investors and buyers.
Trade rules alone are not strong enough incentives to encourage investments in textile production. Instead of relying solely on trade policy tools, governments should design and develop industrial policies that actively support the learning processes of local firms. Part of the industrial policy tool kit to support local firm learning is attracting the ‘right kind of FDI’ and assisting local firms in leveraging technology from these foreign firms. Governments also need to channel public investments towards creating industry-specific knowledge and skills for the textile and apparel sector. This includes building the foundation for moving into new fibre and recycling technologies through investments in basic chemistry education and by supporting partnerships in research between local and foreign firms and researchers.
In developing regional CTA value chains, Patrick Anam, Michael Lawrence, Mathias Knappe, Silvere Tovignan, Nelson Ndirangu and Phyllis Wakiaga outlined the following knowledge gaps and considerations that need to be made by AfCFTA policymakers and negotiators:
• Intra-regional trade of textile and apparel products is low in Africa compared to other regions, such as Asia. One of the reasons is that there is no central database that officials and policymakers can utilise to compare the manufacturing capabilities and policies of other African countries.
• Distribution and logistics services must be considered a priority for developing the CTA’s RVCs, as industrial capacity requires
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an intentional focus on developing national and regional distribution and logistics services.
• National policies supporting local and regional sourcing: The design and implementation of strategic sector-specific national policies focused on local and regional sourcing have been cited as fundamental to the development of CTA sectors. The South African Retail Clothing, Textiles, Footwear and Leather (R-CTFL) Master Plan is an example of such a national policy. It encourages South African retailers to identify commercially viable sourcing opportunities locally and within the continent at large. The single biggest obstacle faced by retailers is, however, identifying commercially viable products that can be locally produced. Intervention is, therefore, required to identify existing textile and apparel production locally and link manufacturers to customers/buyers.
• RoO should encourage the sourcing of local cotton when producing local textiles and apparel: For example, Benin’s apparel companies import fabrics produced from organic cotton instead of sourcing fabrics locally. This is because, despite large quantities of cotton grown in Benin, the country lacks the capability and capacity to add value to cotton and textile production.
• RoO should be simplified for SMEs to understand, calculate, and implement: Complicated RoO will restrict rather than promote trade. Therefore, negotiators should make considerations of they can support local SMEs instead of prioritising the protection of their markets.
• The importance of an investment-friendly environment: Capital already exists to invest in developing textile production locally, however, the signals given to potential investors are not encouraging. For example, although trade under the AfCFTA has been taking place for two years, the textile and apparel RoO is still a persistent issue. This signals to investors that the AfCFTA policymakers do not understand the current capabilities that exist in Africa and therefore cannot reach a common understanding of
what is required to develop textile production.
• The role of financial institutions: The African Development Bank (AfDB) should continue to assist the private sector in investing in the production and beneficiation of cotton. It is crucial, if not necessary, for financial institutions to invest in value-adding activities.
• Where should investment come from? Investments can be obtained from other sources than China, the US and Europe. African businesses can also be considered as potential sources of investment.
• The role apparel retailers/buyers can play in developing textile and apparel production: Retailers’ products, merchandise, and buying planning require that they have access to commercially viable and sustainable sourcing opportunities. Due to these requirements, sourcing from Asia is the preferred option. Shifting sourcing to Africa will require an investment-friendly environment for reliable, commercially viable, sustainable textile and apparel sourcing opportunities.
• Trade facilitation and lessons from East Africa: Administration and non-tariff barriers undermine trade, and measures to address the related issues have not evolved in Southern Africa, such that trade facilitation cannot occur across countries. A value chain requires the free movement of several components across, between, and amongst countries. Policymakers have East Africa’s (The East African Community’s (EAC) 2030 cotton, textile, and apparel strategy) various trade facilitation measures5 to learn from. Those measures applicable in their respective countries to reduce administration and non-tariff barriers can then be identified. This strategy illustrates how collective policy harmonisation can be harnessed regionally to develop its cotton, textile, and apparel sector. African regions need to create sectoral strategies that outline a framework of specific on-the-ground measures that can be implemented to develop textile and apparel production.
• Lessons that can be learnt from other sectors: For instance, Benin has developed
5 The EAC Secretariat, in partnership with the East African Business Council (EABC), established a mechanism in 2003 to identify, monitor and resolve NTBs as they arise. Following this, in 2009, it launched the Time-Bound Programme for the Elimination of Identified/Reported NTBs to improve trade in the region. And, in 2017, the EAC also enacted the EAC Elimination of Non-Tariff Barriers Act, to provide a legal framework for monitoring and addressing NTBs in the region.
9 African textile manufacturing capabilities, investment & rules of origin (RoO) • SUMMARY REPORT
a policy focused on reducing the export of raw materials. From 2023, cashew nuts cannot be exported as raw material but as processed goods. Even though this is an extreme measure and cannot necessarily be implemented in the cotton sector – it is an example that indicates the type of actionable measures for governments to consider.
• Harness Africa’s potential to market itself as a sustainable cotton producer: Currently, this cannot be done as the cotton, textile and apparel segments of the value chain are unaware of each other’s productive capabilities. For instance, cotton producers are not aware of the existing textile manufacturers and their requirements and capabilities, and retailers are not aware of the cotton produced locally and the capabilities of local textile manufacturers. Therefore, marketing Africa as a sustainable cotton producer will require knowledge to be collated on existing cotton and textile production; this will be useful for potential investors and retailers.
• A vertical integration model is required in West Africa: The region is the continent’s most important cotton producer, producing about 60% of Africa’s cotton. The bulk of West Africa’s cotton production is exported outside the continent, accounting for about 15% of world exportation. West African countries have few modern vertically integrated production capabilities in spinning, weaving, knitting or dyeing, resulting in cotton exportation with little to no value addition. Togo, Cote d’Ivoire and Ghana are in the process of adopting new strategies to develop apparel exports in their countries which centre on an eco-industrial park model and vertically integrated knit factories, established through a public-private partnership with Arise Integrated Industrial Platforms.6
• Exchange of knowledge and expertise: Countries need to leverage African cotton and textile production experts both locally and internationally. The exchange of production processes and technology is essential in the beneficiation of cotton and the development of textile manufacturing capabilities.
3.4 RoO and building competitive textile industries in Africa: Policy design
Mr Mohamed Ali provided an overview of the status of the current proposals and the different RoO positions AfCFTA member countries have taken. Of the RoO agreed upon, 87.7% are for all products except textiles, automotive, and two headings that govern sugar production. Textiles account for 10.5% of all trading headings.
The AfCFTA negotiators are faced with two main rules, either a Change in Tariff Heading or more strict processing rules. For instance, in Harmonized System (HS), member states have different opinions and views, which mainly focus on maintaining the status quo of textile and apparel RoO. This means that the textile value chain will not be developed under the AfCFTA unless there is convergence (among all member states) on RoO.
The RoO need to be conducive to encouraging foreign direct investment in the textile and apparel sector. Restrictive and stringent RoO under the AfCFTA will limit the potential to develop textile production. Furthermore, developing regional CTA value chains will require looking beyond RoO and identifying how to attract foreign investment and assessing the type of investment needed to contribute to long-term technological development and industrialisation. Ultimately, developing a CTA RVC will boil down to the role of industrial policy and how to ensure that states use foreign investments for developing domestic technological and productive capabilities.
Several African countries, such as Ethiopia, Mauritius and Madagascar, have attracted FDI and successfully developed industrial policies that support textile and apparel production. A review of their industrial and FDI policies (and those of Asian countries) provides various approaches that can be implemented to attract investment and develop policies focused on building multiple textile bases in Africa. Some of these approaches are noted below:
6 Arise Integrated Industrial Platforms is a pan-African developer that “designs, finances, [develops], and operates industrial ecosystems across Africa. For more information on this organisation see: https://www.ariseiip.com/
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i. Leveraging export market participation is required to build competitive national and regional value chains and high-capability local firms in apparel, textile and raw material production. Ethiopia provides an apt case study in this regard. From a policy and FDI perspective, the model applied by Ethiopia included a combination of interventions, including:
» Policies that targeted buyers and encouraged foreign supplier firms to establish operations in the country and build apparel-specific industrial parks;7
» Targeting textile and accessory firm investments to reduce lead time and capture more value-added production in the country;
» The development of firm clusters based on buyer-supplier-products; and,
» FDI, which can crowd in local firms with industrial policies.
The Ethiopian case demonstrates that developing a textile base makes it easier for locally-owned firms to become more competitive and that FDI can facilitate joint ventures and spillovers such as upgrading production technologies.8 Moreover, if the Ethiopian model could be scaled up to a regional level, it would allow for the creation of broad manufacturing bases across countries.
ii. Knowledge can be leveraged from foreign firms through different types of partnerships (including but not limited to):
» Joint ventures.
» Local firms sub-contracting to foreign firms; and
» FDI that brings in cohorts of experienced managers and technicians that can train locals.
7 In Ethiopia, the government has been proactive in attracting and incentivising textile investments. There has been some foreign investment in stand-alone textile mills in anticipation of high demand from apparel companies. The first apparel industrial park in Ethiopia was launched in 2016 in Hawassa, and was designed in collaboration with PVH (a large US clothing company) together with some of its core apparel and textile suppliers.
8 Through joint ventures or the licensing of technology from foreign companies, Ethiopian businesses have been able to adopt foreign production techniques. Additionally, FDI has also provided Ethiopian companies with the opportunity to hire workers who previously worked for foreign firm and, subsequently, facilitate skills transfer.
11 African textile manufacturing capabilities, investment & rules of origin (RoO) • SUMMARY REPORT
iii. Increasing value addition in raw material production requires greater technical, research, and development investment. Including investments into:
» The development or improvement of a certified organic cotton system;
» Creating foreign partnerships in the production of new fibres and providing government incentives for local firms to invest in new fibre production; and
» National knowledge and skills building (especially in chemistry) and prioritising the development of research and development labs which are needed to support production.
iv. Development of eco-industrial parks: The global fashion industry accounts for 6-8% of greenhouse gas emissions and 20% of global wastewater discharge to rivers and seas. Buyers are under increasing regulatory pressure to reduce climate impact. Increasingly regulations require multinational companies to take responsibility for the climate impact of their supply chains. In doing so, buyers seek a competitive advantage through sustainability and this places new demands on suppliers. These demands require innovations in inputs, production processes and recycling. Eco-industrial parks aim to minimise by-products and unused energy via reuse and recycling within the industrial complex, offering an innovative pathway to sustainable production. The development of eco-industrial parks should include:
» Waste management systems that induce the shift towards sustainable and environmentally conscious production.
» Facilities should allow fibre, textile and clothing production firms to work in proximity with each other and collaborate, offering a package of capabilities to buyers.
v. Potential investors in Africa’s textile sector will be textile and clothing manufacturers from Asia, those that use African cotton, and those familiar with operating in Africa. Attracting potential investors requires:
» Proactive collaboration between the public and private sectors;
» A buyer-driven approach where they initiate the conversation with suppliers to set up production facilities in Africa; and,
» Retailers need to be included in investment discussions.9
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9 For example, during World Cotton Day discussions in October 2021, Mr Price, A South African retailer, indicated that they have enough demand from home textiles to keep a small textile mill in operation for the whole year. However, the South African government has not included them in investment discussions.
