Manufacturing in Africa - the facts
Yes the continent has its problems, but it has scale and potential like no other to become the world’s new manufacturing hub. This is the fresh start that the clothing industry desperately needs. Now local and international players have the opportunity, (and perhaps a responsibility?) to become positive changemakers in Africa’s future.
Words: Bielle Bellingham
It is clear that the global fashion system needs to change from a linear to a circular one, but this is easier said than done. Systemic change won’t happen in isolation. To move away from the ‘take, make, and waste’ models of the past, requires collaborative change at a global level, with pioneering partnerships, and system-wide synergy. We have the opportunity to change what has been a reckless industry into something regenerative and emancipatory, and Africa needs, wants and is well placed to be a key player in this plan.
Currently, the African continent sits at the bottom of the global value chain, accounting for only 1.9% of international manufacturing. The agenda is to industrialise and capture more of the value; so for example, instead of exporting raw cotton, Africa needs to grow the cotton and produce the garments for both the global customer, and African consumers.
Yes, in the past the continent has been considered a dumping ground for the industry's throwaways (which we’ll discuss shortly), but over time, the strengthening of our economies has set Africa up to become a booming, efficient and sustainable manufacturer, and market, for fashion.
And while we’re getting at it, let’s not fall for the ‘Africa rising’ trope. This narrative implies that we’re only now waking up, which is ridiculous and belittles the very real and dire historical and colonial contexts that have delivered much of Africa into a modern state of under-development. The continent has always been wide awake, just disadvantaged. These preconceived notions are some of the biggest problems we face. But against the odds, we’ve always been hard at work, preparing for greatness. And now, finally, is the time.
Against the backdrop of rising prices in Asia, and as the world erects trade barriers – Africa is breaking them down, making it the next ideal manufacturing hub. That said, our future in fashion is not just as a source for raw materials, or manufacturing for international brands. It also needs to be about supporting existing and new local brands.
Africa can also offer the global ‘rag trade’ a fresh start. There’s an opportunity to get it right from the beginning, building a circular model of manufacturing that prioritises profit on the same level as people and the environment. The decision for global fashion brands to move their end-process manufacturing to the continent has become both a viable and ethical consideration. This is not without its challenges of course, but there are some very compelling reasons to do so.
One of the biggest reasons is the tax break it affords companies, owing to the renewal of the African Growth and Opportunity Act (AGOA), which gives certain countries in sub-Saharan Africa duty-free access to the US market. The sub-continent is also blessed with a massive and cost-effective labour pool, ready to be engaged. The United Nations projects that by 2035, the working-age population in sub-Saharan Africa is expected to be as large as China’s today — more than 900 million people.
North African countries like Morocco, Tunisia and Egypt already have developed manufacturing sectors and proven production capabilities. The island of Mauritius is known and highly regarded as a hub for clothing manufacture. East African countries, especially Ethiopia, Kenya and to a lesser extent Uganda and Tanzania have been identified as suitable manufacturing destinations. To maximise and accelerate these opportunities, the various stakeholders (buyers, governments, investors) need to collaborate to improve business conditions in the region.
And there is plenty of work still to be done. Substantial investment is required to improve industrial infrastructure. Public-private sector symbiotic partnerships have to be negotiated. Moreover, all stakeholders need to consider the region as a convincing strategic option, instead of just good PR, or a place to experiment. Fortunately, with Africa’s young population demand is a given, but Governments need to invest in infrastructure and improve free-trade agreements. Suppliers must invest in their workers, upgrade facilities and focus on driving operational excellence at the factory level, reducing waste and steadily increasing efficiency and buyers need to come to the party and drive their trade into Africa’s manufacturing hubs.
IT'S NOT ALL ROSES
This plan is however not without caveats, as the challenges in Africa can be as epic as the opportunities. Africa is a complex geo and socio-political environment. Yes we’re bursting with culture, creativity, natural resources, skills and aspiration, but there are issues of weak governance and social institutions and high levels of poverty, corruption, protectionism, poor infrastructure, bureaucracy and political instability in various places and locales. Even the idea of an ‘African market’ is complicated, with the 54 countries that make up the African Union not yet economically integrated as a single common market. There are about 50 different trading and legal conventions, ten overlapping regional blocs, six climate zones and 2000 spoken languages.
Despite having many seaports, Africa’s logistics and transportation networks are notoriously inferior. It can cost two to three times more to deliver to an African customer than to someone living in a developed country. That said, The Economist calculates that over the past decade, 75,000 kilometres of new road have been built on the continent, thanks largely to Chinese investment. Another challenge is that the power supply is unreliable and can be expensive; factories often have to rely on their own power generation.
Our investment in new technologies is behind that of other developing economies. We need to focus investment in energy, R&D, technological skills, industrial engineering and lean manufacturing. Investment in fabric mills is already underway, but it will take at least five years before they can commit to orders. Until then, Africa will continue to depend primarily on fabric imports from Asia.
Regional consumption is also not high. Fashion Revolution (the world’s largest fashion activism movement founded in the wake of the Rana Plaza disaster in 2013) reports that Africa produces just over 5.6% of the total world production of cotton fibre, but only converts 30% into yarn, fabric and apparel for domestic and regional consumption.
And then there is the notorious second-hand market...
Over the past few years, the growth of the fast fashion industry has created a thriving, lucrative and complex second-hand clothing trade. Most African languages have a word for the mounds of dumped garments that litter the continent. In Kenya, it's mitumba, in Zambia, it's salaula and in Rwanda, it's chagua. No doubt with good intentions, people around the world donate millions of cheap hand-me-downs to the poor. Most of it in fact enters a secondary marketplace governed by free-market principles. This mass influx of used clothing in good condition, which enters the supply chain as a donation, undercuts local apparel production.
Bandana Tewari, editor-at-large at Vogue India explains that ‘at the end of the day, this is a big volume, low margin business. Middlemen are making millions of dollars for their own organisations or social projects, but not much impact is being made to help the really poor in third world countries, especially as the business is so unregulated and opaque. Once worn and torn by the poor, millions of clothes go into third world landfills, far from the affluent countries. Where is the accountability of first world countries dumping used goods on third world grounds?’
But it’s not all doom and gloom. Allana Finley (often referred to as the Olivia Pope of African fashion) has a plan. In an attempt to mitigate the negative impact of this noxious market and resuscitate local apparel manufacturing sectors, her business Ojutu Textiles plans to convert this ‘waste’ into a unique African renewable fibre that will be sold back to the international fashion industry, as well as to the local manufacturing sector. Given that less than 1% of material used to produce clothing is recycled into new clothing (representing a loss of more than USD 100 billion worth of materials each year), this is a game-changer.
ONWARDS AND UPWARDS
Omoyemi Akerele, founder of Lagos Fashion and Design Week has explained that, ‘the global fashion industry must break through its barriers of conformity, fear and uncertainty, to tap into a market that is becoming more lucrative by the day.’ We admit to being a highly fragmented and a rather precarious region at times, but we have the scale and potential like no other, and you don't need to be a maverick or a pioneer to prosper in Africa. The question is whether international players can afford not to join our future? According to the World Bank, the average annual growth rate across the continent is around five percent and the risk-to-reward ratio is much lower than it once was. At this crucial moment, support from international partners has the ripe potential to pay dividends for investors and local businesses alike. Bill McRaith, the chief supply-chain officer at PVH Corp (the US conglomerate that owns Tommy Hilfiger and Calvin Klein) sums it up well, ‘Here’s an opportunity to stand up for something, but do it in a different way than anything we’ve done before. Let’s look back at what we could have done better, or been smarter about the first time around.’