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Several India textile manufacturers are considering setting up textile production plants in Ghana.
This follows a formal proposal by the Chief Executive Officer (CEO) of Ghana Export Promotion Authority (GEPA), Madam Afua Asabea Asare that it has become necessary to enable the two countries benefit from duty free access in Africa through the Africa Continental Free Trade Area (AfCFTA) agreement for products manufactured on the continent.
Instructively, a number of business delegations from India were recently in Ghana to explore various business opportunities and the High Commission of India in Accra arranged regular business engagements with various Ghanaian business chambers aimed at fostering bilateral trade and investment in Ghana. Indeed source at the Ghana Investment Promotion Centre affirm that Madam Asare’s entreaties to Indian textile producers to establish factories here are already persuading some investors from that country to make enquiries into the process for doing this.
Currently, the combined apparel and footwear market in sub-Saharan Africa is estimated to be around US$31 billion. Under the Africa Growth Opportunity Act (AGOA), Ghana exported about US$30 million and US$29 million worth of garments in 2017 and 2016 respectively, all of those exports went to the US markets rather than the African markets.
Ghana’s garment industry recorded a peak growth rate of 15.1 percent in 2008, but this has since dropped to 0.8 and 0.3 percent in 2014 and 2015 respectively. Subsequently, the sector actually recorded a contraction of 1.4 percent in 2016. What this means is that Ghana’s garment industry has been declining in what is proving to be a sustained recession and the recent export data released by GEPA still depicts that Ghana’s textile industry has been underperforming.
India’s overall textile exports from 2017 to 2018 on the other hand stood at US$39.2 billion and is expected to reach US$82.00 billion by 2021. Importantly, the market size of India’s textiles industry as a whole is estimated to be US$250 billion.
With an estimated population of more than one billion people and a combined Gross Domestic Product (GDP) of US$3.4 trillion, having a duty free access to the African free trade area by establishing textile manufacturing plants in Ghana as a member of the free trade area and indeed the host of the AfCFTA secretariat would greatly enhance India’s textile markets access in a market that rivals India’s own in size if not in value.
Speaking with the Goldstreet Business during the official launch of India International Textile Machinery Exhibitions (ITME) Africa 2020 – a global textile business forum to be held in Ethiopia from 14th to 16th February, 2020, the Second Secretary (Commerce) of the High Commission of India in Accra Mr. T. V. Ganesan said the two nations have bilateral relations with economic and commercial ties as its strong pillar.
“Many Ghanaian business firms have established links with Indian textile and clothing industries which we expect would boost trade between the two countries”, he said.
Bilateral trade relations between Ghana and India has seen a considerable increase in the last five years from around US$3 billion to an estimated US$4.5 billion between 2018 and 2019.
Currently, the quantum of India’s investments in Ghana amounts to over US$510 million as the country occupies the second position in terms of projects being 18.
ITME Africa 2020
The Chairman of the India ITME Society, Mr. Hari Shankar is entreating Ghanaian textile industry players to participate in the event next year.
