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‘Textile industry faces imminent collapse’



ZIMBABWE STOCK EXCHANGE listed broker, Fincent Securities has warned that the country’s textile industry may collapse due to plethora of factors such as porous ports of entry among others.


Despite being one of the leading cotton producers on the cotton, exporting to far-flung markets such as China, Zimbabwe’s textile industry has since the turn of the millennium been in the doldrums sending thousands jobless.

An influx of cheap second-hand clothing, smuggling of apparel into the country and a weakening economy has thrown formal clothing retailers and manufacturers into the doldrums.

Local manufacturers are failing to compete with the prices being offered by retailers who import clothes due to the high costs of production and taxation of locally produced clothing apparels.

The government has tried to recapitalise the industry to improve its contribution to the country’s GDP to no avail.

According to a research note done by Fincent, the sector may not recover, as it is likely to witness more closure of companies due to the influx of imported fabrics and clothing.

According to the Zimbabwe Statistics Agency, the textile and clothing industry demonstrated a year-on-year decrease of 6.0% in the production index, while the quarter-on-quarter comparison showed a substantial decline of 41.4%.

On the contrary, the clothing and footwear subsector witnessed a remarkable year-on-year percentage increase of 434.7%. However, during the first quarter of 2023, there was a 13.8% decrease in production compared to the previous quarter.

 “This subsector’s performance seems to be affected by multiple factors, including competition from imported goods, high production costs, and a shortage of skilled workers and its outlook remains uncertain,” said the stockbroker.

“This dip is likely due to the sector’s closed period, which typically occurs from mid-December to the end of January each year. “Despite governments efforts to revive the local textile industry after entering into an agreement with diversified business group, Agro-Value Chain (AVC) to accelerate the revitalization of David Whitehead Textiles,” Fincent said.

Through the agreement, the group injected US$18 million to pave the way for the installation of new equipment, which includes ginning and spinning machines.

The biggest challenge that the industry is facing is completion from the trade of second-hand clothes commonly known in Zimbabwe as mabhero.

The bales of second hand clothes are primarily sourced from abroad via Tanzania, Mozambique, South Africa and Zambia and the merchandise is sold at open-air markets that have sprouted throughout the country over the years.

Last month, the Council of Ministers for the African Continental Free Trade Area (AfCFTA) adopted a protocol to ban trade in second-hand clothes across the continent, to promote value-addition and industrialisation in the textile industry.

The ban would restrict traders from importing second-hand clothes, making the market favourable for formal players in the textile industry.

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