The Sunday News
ZIMBABWE and the Common Market for Eastern and Southern Africa have signed an agreement for the regional trading bloc to provide a 4,2 million euro grant to boost value addition in the clothing sector, a move expected to boost capacity that has fallen to below 10 percent over the years.
The signing ceremony was held during the launch of a five-year Cotton-to-Clothing Strategy in Bulawayo on Friday between Comesa secretary-general, Mr Sindiso Ngwenya and Industry and Commerce Minister Mike Bimha on behalf of the Government.
The fund, according to the agreement, will be earmarked for value addition programmes, namely cotton-to-clothing, leather and leather products, agro-processing as well as capacity building programmes, among others.
In addition, Zimbabwe is set to receive an indicative amount of 1,8 million euros this year and a further indicative amount of over 1,9 million euros, to be disbursed in 2015, which will be for more project components for the period 2015-2016.
However, the country would only secure the funds if the respective regional commitments made for 2013 and 2014 are achieved.
Speaking at the function, Mr Ngwenya said the cotton and clothing industry offers great potential for economic transformation for Zimbabwe and the Comesa region.
“As you all know the cotton-to-clothing value-chain has been the base for industrialisation in many regions starting from Europe and the America, the Far East Asia (Japan, South Korea and now India and China) and perhaps specifically Brazil. It is projected that in the next eight to 15 years basic textile and clothing manufacturing activities will migrate to Africa in their entirety,” said Mr Ngwenya.
He said according to the International Cotton Advisory Committee, the total global cotton fibre demand stood at 26 million tonnes in the course of the 2012/13 season.
Africa contributed about five percent, of which over 80 percent was exported in raw form.
The estimated Chinese fibre consumption per capita per annum is 15 kilogrammes in 2014/2015 season.
This pattern is expected to be sustained and to rise significantly in the next five to 10 years.
Thus, in the medium to long term future, China may well become a net importer of basic textile and clothing products as they gradually advance to the production of Industrial textiles.
“This is why the expansion of the textile and clothing industry in Africa and Zimbabwe in particular is of special significance to all of us in Africa and this region in particular.
“The reason is the sheer potential and likelihood of retaining wealth and jobs in the continent, provided the right decisions and investments are made at all levels — public or private,” Mr Ngwenya said.
Minister Mike Bimha, said the policy was primarily intended to improve production capacity, boost employment and exports as well as increasing the sector’s contribution to Gross Domestic Product through maximising on value addition throughout the entire chain.
“It is articulated around four strategic objectives, firstly to improve the policy environment and framework and to support the development of the cotton to clothing value chain. Secondly, it intends to improve the capacity and cohesion of the trade support network to enhance the effectiveness of Cotton to Clothing value chain.
“Thirdly it aims at enhancing the farmers and firms’ capacity and productivity and this will in turn improve their competitiveness. Lastly but not least, this strategy is anticipated to improve the capacity of businesses to integrate into the domestic, Common Market for Eastern and Southern Africa, Southern Africa Development Community and international markets,” Minister Bimha said.
He said the ultimate goal of the strategy was to create a foundation for greater development of the cotton-to-clothing value chain that would enable players to compete globally through provision of quality finished products.
“As part of Government’s resolute support to resuscitate and nurture and develop the sector it has, in the interim, put measures in place to complement and accelerate the pace and depth of successful implementation of this strategy.
“These measures have been and are still being taken in the full recognition of our obligations which we have to legally comply with under the various regional and international trade treaties,” Minister Bimha said.
Early last year Government allowed clothing manufacturers to import raw materials under a duty rebate system.
This was effected by raising the compound duty from 40 percent plus $1,50 per kilogramme to 40 percent plus $3,50 per kilogramme.
To further curb a deluge of imported products coming into the country by individuals, the Government also removed clothing from travellers’ rebate.
Minister Bimha said this week, Government will introduce customs duty on finished imported blankets which are being smuggled under the guise of raw materials, primarily because hemming, again disguised as value addition was going to be undertaken locally.
