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The global fashion industry is a lucrative business valued at $2.4 trillion (R35.6 trillion) and employs some 300 million people across its value chains.
This sector is a crucial source of employment and is also a big gross domestic product (GDP) contributor for emerging and developed economies.
While current total industry employment figures are not available, in 2014 the global textile, clothing and footwear sectors were estimated to employ between 60 million and 75 million people, three quarter of them women.
In South Africa, due to huge job losses because of cheap imports, the industry now employs about 80 000 people.
But this industry is due to get a much-needed boost in the form of Trade and Industry Minister Ebrahim Patel’s new masterplan for the sector.
Patel, in his budget speech, said: “To promote local fashion and jobs in the industry, we will finalise an industry masterplan, containing proposals dealing with the future of the incentive scheme, trade measures to address illegal imports and value-chain competitiveness.”
Industry discussions started in July to get a consensus on a sector-social pact.
As part of the incentive scheme, Patel recently signed a new deal with local retailers to source locally – which will benefit local designers.
Frontier for fashion retail
Several factors have lined up and developments in different parts of Africa are a testimony to a transition towards a market that is transforming itself from an eyesore to an illustrious opportunity.
Such factors are:
- Democratic governing principles supported by policy measures geared towards economic growth, globalisation and an improved position in international trade relations.
Various African governments have signed up for the much-talked-about Continental Free Trade Area Agreement, which is supposed to boost opportunities for intra-Africa trade that currently comprises just 15% of the continent’s total merchandise trade.
This is particularly low when compared with intraregional trade in other continents – 67% in Europe, 58% in Asia and 48% in North America.
- Expanding economies, a rising youth population, the increasing size and power of cities are creating new values of consumers, in particular tangible and dramatic economic benefits that translate into rising incomes.
- An enabling environment and fiscal support for sustainable development wherein production and consumption patterns are attentive to current environmental concerns with local businesses supporting fair trade initiatives.
SA’s case for investment
The global economy is going through a lull and with the International Monetary Fund lowering the forecast for South Africa’s economic growth, long-term investment and strategic manufacturing, especially of high-end fashion, will only become profitable for local designers in the long run.
The global sales of luxury brands for 2017 amounted to $10.6 billion. Consulting firm Bain puts the South African luxury industry at $7.4 billion, nearly 2% of the country’s GDP.
This was partially driven by the rise of high-net-worth and ultrahigh-net-worth individuals in African countries that have experienced increases in economic growth and consumption.
South Africa needs to reposition itself as a manufacturing base given its technological capabilities in producing high quality value-added materials.
We need to emulate countries such as Ethiopia and more recently Rwanda, that are establishing themselves as primary manufacturing hubs.
Ethiopia, which received a $30 billion boost to annual export revenue in the textile and apparel sectors, employs more that 25 000 in the fashion and clothing industry.
Now global, apparel buyers are sourcing basic, large-volume items from Ethiopia. As much as 60% of exports are sent to Germany and 10% to the US.
But according to the World Trade Organisation, Ethiopia accounts for a mere 0.01% of total apparel exports.
South Africa is perfectly poised to grab a larger piece of this lucrative industry given its many advantages, including its location, First World infrastructure and fair labour practices.
The rising costs among traditionally cheaper manufacturing countries such as China – which are becoming more expensive as workers demand higher wages and increasing global safety concerns over sweat shops – simply add to the country’s viability.
New markets, new technologies and shifting consumer needs can easily translate into more opportunities for us.
As one of the respected and major players in the local fashion, clothing and apparel industry, African Fashion International (AFI) is at the forefront of developing and supporting the industry along its value chain.
Over the past 12 years, AFI has invested millions working in the incubation, development and internationalisation of creative fashion from north of Africa to the southern most tip of Africa.
The fashion and clothing industry can create many jobs because of its low barriers to entry and its labour intensive nature.
We provide support, unearth talent and award the best designers, giving them marketing, business and trade platforms.
Moloi-Motsepe is founder and executive chairperson of African Fashion International
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