|June 14, 2007
Clothing and textiles become unstitched
Following the liberalization of the global trade in textiles and clothing between 1994 and 2005, Malawi has seen an influx of second-hand clothing on the local market. But while consumers have been happily buying cheap items on almost every street corner, the country's textile industry has been steadily collapsing.
Despite Malawi being among the developing states allowed to export textiles and garments to the US market under the preferential access provided by the Africa Growth and Opportunity Act (AGOA), the country's textile industry is still failing to advance.
Up to 65 percent of Malawians are living in poverty, which means having less than 1 US dollar per day. Most people would rather spend the little they have on necessities other than clothing. But the lack of internal markets is not the only problem that Malawi's textile industry faces. Chairperson of the Garments and Textile Manufacturers Association of Malawi, Kantilal Desai, who owns a textile company called Knitwear Industries, says that AGOA has favourable conditions which offer tangible incentives for African countries to continue their efforts to open their economies and markets. But Malawi is still failing to export much under the trade arrangement. There is no investment from the private sector in the textile industry. Currently, Desai's own company has orders amounting to 6 million US dollars which it cannot fill. "We lack machinery and trained personnel to handle current market demand," he said, adding that there was need for more private investment in the industry.
The Malawi Investment Promotion Agency (MIPA), a body that works towards attracting, facilitating and encouraging both foreign and local investment, has been calling on investors to start large-scale cotton farming on estates.
Presently cotton is mostly grown by smallholder farmers. Two districts of Chikwawa and Nsanje, located in Malawi's Lower Shire valley, produce about 31,.144 tons of cotton out of a national total of close to 50.000 tons. According to MIPA, the cotton produced is not enough to meet the ginning capacity that is available in the country. The three ginning companies, Great Lakes Cotton Company, Clark Cotton and Iponga, use only 30 percent of their processing capacity.
Many farmers in Malawi are becoming reluctant to grow cotton. They feel that it is not as profitable as other crops since cotton prices are low. Cotton is Malawi's third biggest export product, with tobacco being number one. The pricing problem is currently dogging both tobacco and cotton.
In May, the Malawian government ruled that the minimum price of cotton this year should not be less than three cents. Last year's price was two cents per kilogramme but the cotton buyers protested and boycotted the procurement. The buyers argued that they have to pay taxes and so need to pay less than what the government was prescribing. Principal Secretary in the ministry of agriculture, Patrick Kabambe, said that it was impossible to reduce the prices as they were agreed to at the highest government level. The buyers were left with no choice but to buy the cotton at the recommended price.
James Chuang, the ambassador for Taiwan, has since promised to help Malawi's textile sector by assisting with the growth of organic cotton which, he says, has a high potential on the international market. Malawian president Bingu wa Mutharika is supportive of the plan. He says that Taiwan, as Malawi's trade partner, will help grow organic cotton on a large scale. Mutharika has encouraged companies to utilize locally grown cotton to feed into the textile manufacturing rather than exporting it.