Free trade collapses Textile Industry

Textile manufacturers in the country have blamed the uncompetitivenes of their products on trade liberalization, saying the phenomenon has gravely destabilized their operations.

According to the manufacturers, the importation of cheap and inferior textiles into the country on the back of trade liberalization, especially from Asia, was rendering a lot of textile workers redundant, with uncontrollable repercussions on the industry.

Edwina Assan, president of Spinnet Textile and Garment Cluster, an association of local textile manufacturers, speaking at a press conference in Accra, said huge quantities of textile products continue to be smuggled into the country and these comprise pirated designs of local manufacturers and their logos while some of them bear the Ghana Standard Authority (GSA)’s symbol.

“Some are also under-declared, wrongly described, just to escape taxes and be sold cheaply. These textile products compound the plight of the local textile industry,” Ms Assan explained, adding that the association’s members face other challenges such as difficulty in finding efficient skilled labour, management skills, lack of capital for expansion and the enhancement of the finishing and packaging of products.

She said funds available to micro-enterprises were too expensive to access while interest rates ranged from 4 and 10 percent per month, virtually extinguishing small enterprises.

In spite of the challenges, she said members of the association were upgrading their production capacity to enable them meet international standards.

“Because of these challenges, there has been a drastic reduction in members of the association’s production capacity by 60 percent. This has affected the employment level of their companies. Exports have also been affected as very small quantities of their products now get onto the international market. The effect of this is the loss of the much-needed foreign exchange earnings to the nation,” she added.

To remedy the situation, she said Spinnet sought the support of the Business Sector Advisory Challenge (BUSAC) Fund to carry out an evidence-based advocacy action to facilitate the development of minimum standards for the textile and garments industry to ensure a fair playing ground.

Research conducted into the issue lately showed that even though Ghana had established standards to regulate the influx of textile products into the country, enforcement of the standards has been very difficult for the GSA.

The association therefore called for a one port destination for all imported textiles, protection of intellectual property as far as pirating local textiles were concerned and a check to be mounted at the country’s borders to ensure transparency.

It also called on the Ministry of Trade & Industry to give incentives to encourage local firms to go into the manufacture of inputs for textiles and garments in Ghana so as to reduce the cost of inputs. Between 1970 and the early part of 1980, the textile sector was a major player in Ghana’s industrial sector contributing significantly to employment and growth.

The textile sub-sector used to employ over 25,000 workers nationwide, accounting for 27 percent of total manufacturing employment and at a time when industry was operating at 60 percent plant capacity.