Africa is rapidly becoming a niche market for the apparel industry. Let's go deep into the African market to find out the supporting factors in its rapid development.

2. • Africa as a continent is made up of 54 countries, inhabiting more than 1.2 billion people
together.
• The Eastern and Western Africa are the most populated regions, accounting for 60% of the
total population of the continent.
• In terms of population, Nigeria, Egypt, Ethiopia, and South Africa are the biggest countries.
• By 2050, the IMF predicts the total population of Africa to reach up to 2.4 billion.
• The young population, consumer class, and an educated workforce, all are seeing a growth
spurt in Africa, especially in the East African region.
• Made up of Kenya, Uganda, Ethiopia, Tanzania, Burundi and Rwanda all showcase a growing
geopolitical and economic importance on the global platform.
• Africa is experiencing a strong GDP growth, better governance and infrastructure, and most
importantly a burgeoning middle class, which is attracting more investors to the region,
across industries.
Is "Made In Africa" The Next Big Thing?

3. Why Africa?
Economic Growth:
– Blessed with abundant natural resources, Africa is a massive continent, with a huge
population which is young, (40% of the African population is under the age of 17).
– Africa has what it takes to be portrayed as potentially the biggest emerging market
in the world, and rightfully so.
– A recent IMF research has shown that 7 out of the 10 fastest growing economies in
the world are located in Africa.
– The Sub-Saharan African Region has the second fastest growing economy in the
world, as per a Moody’s survey.
– Both urbanization and technological transformation have move Africa towards a
new socioeconomic reality in the past decades.

4. Why Africa?
Urbanization:
– Africa is urbanizing at a rate nearly double that of China, and as per the African Development Bank data,
over 500 million people are expected to move into cities in the next 35 years.
– Lagos, Nigeria’s commercial capital is experiencing urbanization at a quadrupled rate than the global
average.
– This is positively impacting both the young labor force availability (read productivity) for industries in Africa,
and the general access to educational, medical and sanitation facilities.
– This is also leading to a boost in urban infrastructure investments, both by government bodies and private
investors.
– Africa has seen a steady growth in its middle-class city dwellers in the past decade.
– By 2030, around half the Sub Saharan Region population will be living in cities, the direct impact of which is
a visible boom in the service and manufacturing sectors in the region. Africa’s dependence on its natural
resources and rural economy is slowly declining.
– Deeper Internet penetration, GDP boost, and growing retail sector are putting Africa as a dominant player
on the global industrial map.

5. Why Africa?
Technology Up gradation:
– Technological advancements are also driving Africa’s growth.
– It has substantially reduced the transaction costs and eased social interactions
across the continent.
– By 2020, it is predicted that 200 million people in Africa will be using some form of
the social media network.
– Also, the young workforce in the urban areas has the potential to drive new IT
development in their areas.

6. Why Africa?
FDI Inflow:
– The UN Conference on Trade and Development’s (UNCTAD) World Investment Report, 2015
highlighted 5% growth in FDI, especially in the sub-Saharan Region, in the financial year,
when the global inflow experienced a fall as big as 16%.
– The major inflow of FDI as per the report was into the strong mineral sectors of the eastern
countries of Tanzania and Uganda, which has oil and gas industry dominating their
economies.
– FDI in services and manufacturing has also seen a growth spurt. Countries are also trying to
together make East Africa as the cooperative trading corridor.

7. Why Africa?
AGOA:
– The African Growth and Opportunity Act (AGOA), approved by US Congress in 2000, with the
sole focus of assisting Sub-Saharan Economies and improving their economic and trade
relations with the US, which is evidently of the major global buyers has proven a boon for
African industry.
– It currently stands valid till 2025. AGOA allows preferential trade and duty-free access for
certain African products within the US.
– Textile and Apparel industry within Africa has substantially benefitted through this trade deal,
which has led to tremendous growth in the South and East African textile and apparel
industries.

8. Textile & Garment Sector in Africa
• South Africa alone produces around 40000 tons of cotton every year, to feed its textile value
chain.
• South African textile and apparel industry contributes 14% to the country’s manufacturing
employment, 9% to its GDP and serves as the second largest tax revenue source to the South
African government.
• Now if we take a look at East Africa, East African countries, specifically Kenya and Ethiopia have
already gained significant attention in the global textile and apparel trade.
• Many big players in the field, like Primark, H&M, Tesco, etc. are already sourcing their apparel
from Ethiopia. The AGOA enabled duty-free access to the lucrative US market is an added
advantage that these countries are capitalizing on.

9. Textile & Garment Sector in Africa
• Chinese apparel production is now seeing a downward trend, owing to its rising cost, labor, and
environmental practices, and most importantly in the light of the recent US sanctions.
• China with other Asian players like Bangladesh, Vietnam, and India, still hold the baton in the global
scenario, but African countries are speedily taking over, and are expected to pay a major role in the
apparel manufacturing industry in the coming years.
• The UN projects that the Sub-Saharan African region will have the working-age population, as big as
current day China by 2035. This labor pool is catching a lot of attention for many industries.
• Apparel manufacturing is a labor-intensive industry, makes Sub-Saharan Africa a prime contender in
the future.
• Amongst these countries, Ethiopia, Kenya, Uganda, and Tanzania are appealing to the apparel
buyers the most. The governments of these countries are working well towards developing their
domestic apparel and textile industries to keep the lead going ahead.

10. Textile & Garment Sector in Africa
• We have already seen how Ethiopia, Egypt, and Kenya are dominating the global arena in our
previous articles in depth. In this article, we can touch upon the other potential players in Africa.
• Tanzania is another East African country to watch out for. It has had a growth rate of above 7% for
the past few years and it cherishes one of the best performing economies in Africa.
• Although the government in Tanzania identifies tourism, transport, real estate and IT as their prime
focus areas currently, budding local entrepreneurs are taking advantage of the situation and moving
ahead in the race.
• Uganda, on the other hand, is endowed with an abundance of natural resources and possesses the
potential to feed the whole of Africa if commercially farmed.

11. Textile & Garment Sector in Africa
• Uganda is a member of WTO and General Agreement on Tariffs and Trade, which gives it a trade advantage
over many competitors.
• Since 1995, Uganda has also seen an economic growth owing to Structural adjustments in its governance
which make it a potential player for the future.
• Similarly, Mauritius and Lesotho are countries with high levels of literacy rate (88.2% in Mauritius and 73.7% in
Lesotho) and big population to support a skilled labor pool, which makes them attractive for apparel
manufacturers around the world.
• The above information clearly showcases that Africa is fast becoming a niche market, especially owing to their
free-trade agreements with the US and the EU.
• Volatility in their political environments, and currencies and equity markets, does restrict their growth.
Irrespective of the global and local turmoil, Africa is set to become the new sourcing hub for apparel
manufacturers.
• The basic requisite for the sustainable growth of the apparel industry in Africa is the collaboration of all the
stakeholders.

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