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Oliver Kazunga Senior Business Reporter

THE local clothing industry presents one of the best opportunities to expedite the creation of formal jobs in the country beyond the current 6 500 while driving the Government’s value-addition agenda, an industry official has said.

 At some point, Zimbabwe’s clothing sector used to employ 35 000 people.

The Zimbabwe Manufacturers Clothing Association (ZCMA) Jeremy Youmans told The Herald Finance and Business that most of the capacity, which anchored the yesteryear glory, was lying idle and awaited utilisation if sufficient orders and supply of raw materials could be secured.

Mr Youmans, who is also the Association of Cotton Value Adders of Zimbabwe (ACVAZ) vice chairman, said as has happened in most developing countries, where the clothing sector has been used as a driver of value-added growth, there was no reason Zimbabwe could not do the same.

“The clothing industry represents one of the best opportunities to speedily generate jobs and retain value addition within the country.  

“Most developing countries have used the clothing sector as a driver of value-added growth within their economic growth strategies and there is no reason why Zimbabwe should not be able to do so as well.

“Whilst the economy is dominated by mining and agriculture, it is vital to also develop value addition within the country by developing the manufacturing sectors,” he said.

ACVAZ was set up to coordinate the implementation of the Zimbabwe Cotton to Clothing Strategy between 2014 and 2019.

Mr Youmans said exported raw materials and imported finished goods denied the country potential for real growth, as the value addition, along with the jobs used to create it, was utilised and realised in other countries.      

“The more of the value addition which is done in Zimbabwe, the more jobs that will be created, the more import substitution that will be effected and higher value exports will be created.    

“Both will have a significant effect on the balance of payments problem the country currently faces, which is restricting so much other economic activity.

“The clothing industry is especially efficient as an economic driver due to it being so labour intensive, its low capital requirements, low energy and services requirement and its low impact on the environment.”

He said many industries were using technology to substantially reduce direct labour content, but clothing manufacture cannot be substantially affected by technology as robots and computerisation are unable to deal with the flexibility and non-consistency of fabric.  

Most of the processes need human participation and that will not change in the foreseeable future, he said.  

“Therefore, it will always remain a high employment sector. Zimbabwe needs to drastically grow its formal employment and the clothing industry provides a basis to do this.    

“Most other countries that have supported and developed their clothing sector have then been able to use this as a base to develop and integrate their cotton value chains, China and Bangladesh being two of the biggest examples.      

“Such models are attractive to investors, as investors do not need to develop their market, as it already exists.”   Historically, Zimbabwe has used a production-driven model (produce cotton and push value addition of the cotton produced up the chain).

Presently, Zimbabwe exports 98 percent of its cotton lint and the lint that is value added within the country, most of the cotton yarn is exported to South Africa.

A market-driven approach to the value chain development would rebuild the linkages between the stages and the synergy this would create would develop the whole value chain including the production of edible oils and animal feed as by-products of the cotton seed.                      

Mr Youmans said the single biggest factor restricting the exponential growth of the clothing sector is the lack of access to competitive raw materials, particularly fabric.      

He said ZCMA members regularly complained about uncompetitive price, and poor quality, particularly in the finishing (dyeing and wet-processing) as well as lack of supply, months after having paid advance payments for the few fabrics which can be supplied.    

On the implementation of the Zimbabwe Cotton to Clothing Strategy (2014-2019), Mr Youmans said the strategy was stumbling along due to lack of funding for ACVAZ to perform the co-ordination role as well as lack of a consistent approach on how to develop the value chain.    

“The resources were simply not available to develop all stages at one time.  The cotton growing stage must focus on quality and yield to ensure the cotton farmer has a crop that is economical to farm.    

“The fact that so much of the crop will be exported in the short-term should not be the main concern.      

“The value chain must be grown from the market end so that the chain is developing its own market to supply.       The clothing sector will never be able to survive only making clothing from 100 percent cotton fabrics, as its customers want a full range of clothing items to be supplied.”

As the clothing sector grows, he said the proportion of its demand which is for cotton will be sufficient to sustain significant textile output.  

“Likewise, the ready demand would be sufficient to attract investors who would supply the other fabrics the current suppliers are not prepared to make, for example, polyester or cotton blends and polyester fabrics.”

 Mr Youmans said the clothing industry is excited about the opportunity the Second Republic has created, adding that various interventions would be implemented or further developed.      

“These included a greater focus on local procurement from government, parastatals, local Government, private sector and foreign-funded infrastructure and development projects.      

“Direct allocations of import facilities to clothing manufacturers and a greater level of import compliance at the borders and clearing ports needed to be realised.

The clothing sector, like many other manufacturing sub-sectors, has a Clothing Manufacturers Rebate (CMR) which enables clothing manufacturers to import certain raw materials for manufacture duty-free.    “It does not include raw materials which are being manufactured in the country and manufacturers have to pay the full rate of duty on these to support the local textile industry,” he said, adding that the CMR is an essential support measure for the sector to assist it in competing with imported finished garments which have no duty levied on them.  

However, Mr Youmans said, the existing modalities imposed by the Zimbabwe Revenue Authority (Zimra) to gain access to CMR are punitive and particularly affect Small to Medium Enterprises (SMEs).

As SMEs form the vast bulk of the sector, he said the full benefits of the scheme cannot be realised.    

 “We have lobbied with the Ministry of Industry and Commerce and Ministry of Finance for years for the necessary reforms to the rebate scheme, but to date, nothing has been changed.    

“We need the requirement to have a bond and a separate warehouse removed and certain polyester fabrics and other raw materials which are not manufactured in this country added on to the rebate scheme.     Without it, we will be unable to realise the full effect this sector can have on the regrowth of our economy,” he said.

With more dialogue with the international world being stated as a key objective of the Second Republic, significant opportunities can be realised for the export of clothing made in Zimbabwe, said Mr Youmans.    

“The greater level of dialogue needs to lead to the international world getting a better understanding of the high level of social responsibility that exists within the local industry and develop this into Zimbabwean companies being suppliers of choice, due to its high level of Corporate Social Responsibility.  

“Improved relations with the international world should also lead to the repeal of legislation affecting the United States sanctions on certain entities.  

“The collateral damage of these sanctions goes way beyond the identified entities and it is real and substantial in its restricting effect on trade opportunities and processes.    

“Linked to this is the lack of access to the African Growth and Opportunities Act (AGOA) which would enable Zimbabwean manufactured goods to be exported to the USA duty-free and quota-free. 

 Most of the rest of Africa has this access and many African countries, such as Ethiopia, Madagascar, Lesotho, and Swaziland, among others, have developed huge clothing and textile sectors based on supply to the US under AGOA.