Textile Firms Collapsing
Ms Hannah Tetteh
Twenty-One textile factories in Ghana have collapsed over the past three decades due to the influx of cheap foreign fabrics.
The cheap textile imports appear to have plunged the local industry into even more serious crisis with a drop in production from 130 million metres in the 1970s to 25 million metres now and a further 60 per cent drop in textile sector employment.
Among the famous local textile factories that have collapsed over the period are GTMC, Tema Textiles Limited and Anitex.
The only surviving ones are GTP, Printex and ATL, with Juapong Textiles almost shut down.
As a result of the glut of cheap foreign imports, local textile manufacturers, who revealed the distressing statistics this week, have launched a campaign to save the local textile industry from total collapse.
“We have to wake up and save the textile industry, else the remaining three local textile factories will be gone. We cannot leave it all to the government; we have to support it,” Joseph Chester Anie, the Public Relations Officer of PRINTEX and CEO of Potpourri Productions, which is co-ordinating the campaign, told the Daily Graphic.
He said the campaign was aimed at creating public awareness of smuggled and illegally imported textile products and also promote locally produced textiles, as it is estimated that more than 70 per cent of fabrics sold on the Ghanaian market presently are imported avoiding taxes and duties by misrepresentation, under-invoicing, partial duty payment or through smuggling.
Some analysts the Daily Graphic spoke to blamed the difficulties on an over-stretched liberalisation policy adopted over the years.
In a historical overview of the industry, Mr Kyekye-Tanoh of the Third World Network said the woes of the textile industry began in the 1980s as a result of shortage of raw materials and foreign exchange, saying that by the 1990s most of the textile companies had outdated skills and equipment.
He explained that as a result, it made more economic sense to import than to produce the textiles locally and the governments then did very little to protect the local industry.
“A lot of the time government policy is made with short-term considerations, instead of long-term ones,” he stated, and stressed that it was not economically healthy to allow a sector to collapse just because it was not import competitive.
For many buyers, the first consideration is the price, and the difference between high-quality, locally produced textiles and cheap imports is quite significant. While some high-quality fabrics sell at GH¢30 a piece, the cheap imports may go for GH¢15 a piece. Good savings, perhaps?
“The quality ones are more expensive so it is more economical to go for the cheap foreign imports,” Veronica, a typist in Accra argued. “I usually buy the cheap imports. As for the quality textiles, I buy them once in a while.”
But that is an argument Mr Anie dismissed outright, explaining that in the long term it made economic sense to buy the high-quality fabric.
“It is better to buy high-quality fabric that will last than to go for a cheap one that fades in no time,” he emphasised.
However, despite the variations in pricing, the government has duly recognised the need to protect the local industry by ensuring that imported textiles go through the right channels and the appropriate taxes and duties are paid on them.
The immediate past government of the New Patriotic Party (NPP), in a bid to check illegal smuggling of textile products from other African countries, introduced a policy to streamline imports through the adoption of a single corridor for the importation of textiles from other African countries. The Takoradi Harbour was the single corridor for such imports.
But, quite surprisingly, that policy was abandoned last year. Mr Anie believes that it may be helpful to revisit that policy.
The Ministry of Trade has, indeed, declared its intention to revisit that policy.
The sector Minister, Ms Hannah Tetteh, has emphasised the NDC government’s commitment to halt the smuggling of textile products into country.
At a recent meeting with textile manufacturers, she assured them that the government would support their cause.
However, Mr Kyekye-Tanoh, while admitting the potential usefulness of such a policy, believed that it would take more than such a policy to rescue the local textile industry.
“Indiscriminate trade liberalisation is not right,” he stressed. He implored the government to be faithful to the national trade policy and institute policies that would provide competitive advantage for local producers.
“Look at what the American and Asian governments are doing to support their local industries. We have to place our local interest first. Leaving everything to the market alone is unreliable,” he argued.
Source: Daily Graphic
