Prospects for the textile and clothing industry in South Africa

The textile and clothing industry in South Africa is a relatively small sector within the country's economy. Indeed, in 2012 it accounted for only 3% of the output of South Africa's manufacturing industry as a whole, and its exports accounted for only 0.4% of the country's total merchandise exports. The textile and clothing industry has been shaped significantly by the African Growth and Opportunity Act (AGOA), which was implemented in October 2000. The agreement led to a significant influx of investment by overseas manufacturers into the region, particularly those based in China and Taiwan. However, the resulting level of trade failed to live up to expectations and therefore the attractiveness of South Africa as an investment location diminished. As a consequence, the number of companies and the number of employees in the industry have declined in recent years, and so have clothing exports. Textile exports have increased but these consist largely of raw materials in their least converted form-such as uncarded wool and raw cotton. Nevertheless, the textile and clothing industry has the potential to be a significant employer within the country's manufacturing sector, and an important part of the South African government's industrial policy is to stop the decline of the industry and facilitate its growth. To this end, it has supported the development of textile and clothing industry clusters-by helping with investment in infrastructure and implementation of best practice. Also, it provides incentives through the Competitiveness Improvement Programme (CIP) and the Production Incentive Programme (PIP). In the retail sector, demand has been expanding as a result of growth in the economy since the global recession of 2009. However, the main beneficiaries of the expansion in retail demand have been foreign suppliers-mainly in Asia and other countries in Sub-Saharan Africa. In fact, clothing imports have grown significantly in recent years. © Textiles Intelligence Limited 2013.