The government of Ghana will soon introduce a textile and garment manufacturing policy. The policy, which seeks to attract and facilitate targeted investments into the industry, is currently in its draft state and is expected to receive the approval of the cabinet later in the year.
Local manufacturers are optimistic that when implemented, this policy will create a fair playing field for them to compete.
The National Coordinator for the Association of Ghana Apparel Manufacturers (AGAM), Nana Pokua A.A. Adiamah, and Head of Sales and Marketing for Akosombo Industries Limited Petra Aba Asamoah, during a discussion with Kennedy Mornah on Eye on Port, said they anticipate that the policy will inject some vibrancy into the sector and help them compete favorably in the African and International market.
According to them, this has become even more crucial with the free African market in sight and the growing demand for “African prints” in the diaspora.
Currently, the industry is bedeviled by the influx of foreign pirated textiles and garments that come at cheaper prices, running local manufacturers out of business. The industry claims that this is made possible by the significant disparities in production costs between domestic manufacturers and their foreign rivals.
“When it comes to the influx, I think primarily our biggest challenge is not just the price points but also the fact that largely these textiles have our designs and our brands pirated. If there’s a design like the one I’m wearing and they find that it’s a fast-moving design on the market, one of their local reps will send it, they will copy it and export it here and undercut the price that the original ones are going for. We’re hoping that the policy would capture this also because beyond it just being the copying of designs they’re also copying our trademarks so you would find that their products on the markets have registered trademarks of ATL, GTP, or Printex that are not produced here. That’s a big problem but it’s not just a problem because they have the designs but they’re coming in at a price point that we cannot compete with,” the Head of Sales and Marketing for the famous “Akosombo Textiles” lamented.
While acknowledging certain tax incentives given to them over recent years, they lamented that the current costs of utilities and import bills of inputs still render their final products uncompetitive on the market.
Sadly, according to Mrs. Adiamah and Ms. Asamoah, the quantity of cotton produced in Ghana is woefully inadequate to serve the raw material needs of local manufacturers leading to the heavy reliance on imported raw materials which tends to contribute to the high cost of production.
“At the moment we import most of our raw materials and when I talk about imports you know what that means – high interest rates, duties, clearing charges, and others. In addition to that, you have the delays that come in with in terms of turning around production,” the National Coordinator for AGAM said.
They expressed hope that the policy will take care of the entire supply chain and provide lasting remedies so far as the cost-effective sourcing of raw materials is concerned.
Low enforcement of import management laws and competition rights have also served as a harder blow to the competitiveness of local manufacturers. However, they are excited about the tax stamp policy that has been introduced by the government and appeal that such policies are enforced and sustained.
“The gap now is the implementation from the ports of entry and the ministry assures us that once this policy is in place then enforcement will also begin because that’s a key point. We’re not saying that there should be no competition from other markets. What we’re asking for is that it should be a level playing field for all of us to be able to compete,” Petra Aba Asamoah continued.
Moreover, given the fast-evolving nature of the textile and apparel manufacturing business, modern machinery and updated technology have become even more necessary.
This is not the forte of Ghanaian manufacturing companies according to Mrs. Adiamah who expects the policy to not only propel engagements with private investors but improve access to affordable tailor-made long-term financial packages.
“Our line of production is mass production and you need a factory to do the kind of production that is required and so if you looking at one line of production, it should have at least 20 machines and that is just the standard machines and I’m not talking about the other specialized machines. Because the sector is quite capital intensive the private investor may not be able to do everything that is required to be able to get the business going so access to financing that is cheaper, easily accessible, and targeted for the manufacturer is the kind of finance that we need,” Mrs. Adiamah appealed.
It is no news that the textile and garment manufacturing sector remains one of the nation’s anchor sectors for development, contributing an estimated 30% of the GDP of the manufacturing and services industry. With over 10,000 association members and a similar number of non-members, the sector remains a large employer of Ghanaians.
In 2023, 40 million dollars worth of exports were generated by the sector, indicating that despite the abovementioned barriers, the industry still thrives.
However, considering the 2-billion-dollar worth spent in Africa on textile products, it is evident that there’s room for Ghanaian manufacturers to compete and grow. The industry is optimistic that the upcoming policy will propel the transformation of the sector.
Source: Eye on Port