Times Of Swaziland: TEXTILE INDUSTRY MASTER PLAN

TEXTILE INDUSTRY MASTER PLAN
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Bandiswa Vilane on 06/11/2024 06:51:00


THE textile industry is under immense pressure for its own survival and
sustainability. Global, regional and domestic conditions are staked against the
sector. While, we have a government that seems to be nonchalant about the fate
of the industry, its beneficiaries and the benefits to the economy as a whole.
We have become accustomed to reading about lay offs or closure of firms within
the industry. This is a vital sector for the economy, holds so much potential
for growth. South Africa’s textile master plan will kill the sector if our
government does not assist the sector, through coordinated efforts, in a
document akin to a master plan. We seem to be shifting priorities to new areas
without putting in place mechanisms that ensure that we are able to reap and
sustain the gains we have made in other industries.
Shifting focus
Industry shifting or strategic focus is an inevitable reality of commerce. The
question we should be asking is what then needs to happen to the industries that
are becoming obsolete. I often make reference to the Taiwan story and how they
managed shifting needs in industry and ensuring that existing industries are
assisted to adapt. Following the economic miracle of Taiwan, pivotal to their
success strategy was the ability to handle the metamorphosis within industry.
In Taiwan, the planning ensured that when new industries come to light, old
industries are assisted to remain profitable, training and re-training
programmes were always aligned with the needs of industry and the skills level
in the country. Furthermore, support to industries was provided by the
government to ensure that they survive. I make the same point, that our
industrialisation strategy does not have to be forward looking only, it is also
incumbent on us as a country to ensure that within the same strategy we are able
to consider existing industries and how they should be supported.
Safeguarding the sector
I call on the Government of the Kingdom of Eswatini to do more towards assisting
the sector to survive and thrive. The sector creates and skills its own labour
force, this imposes an additional cost to the firm. Government can come in
through the Ministry of Education and Training to support the training endeavor.
Resulting in improved productivity and ultimately margins for the industry,
providing much wiggle room for the sector. Also, trainings can also be extended
to service personnel so that the machinery used in the sector can also be
serviced domestically.
There are multiple ripple effects to this move. Firstly, a critical mass of
skilled personnel would be spread across the country, making it relatively easy
to decentralise the industry as the costs of entry would be relatively lowered.
Secondly, emaSwati with the skills will be put in a better position to start and
run cottage factories, living bigger firms to sourcing orders and maintaining
quality control. This is a very low hanging fruit as all that is required is
some capital injection which can be sourced from the RDF and other existing
government loan schemes.
This level of decentralisation has the  potential to open up new markets and new
uses for what ideally would be referred to as waste within the textile
industrial complex, improving on the environmental impacts and the general
wellbeing of emaSwati. Lastly, a master plan which has these components will
also create a service value chain and that is an entire industry we have not
exploited as a country, all these services are imported.
Cost support
A comprehensive strategy also requires government to provide a cost subsidy in
the form of reduced taxes and lowered rentals to mention a few. At the onset,
this might seem to be a loss of revenues for government. However, I argue that
most likely, this would be made up in the VAT collections as more people are
employed in the sector and their propensity to spend is skewed for the domestic
market. Also, decentralisation may also lead to a rise in local industries in
the rural areas, increasing on the vat collected and the corporate taxes
collected. I see an entire textile and apparel industry dominated by locally
produced commodities.
The multiplier effect from these cost concessions will likely be greater than
the revenue that government is currently collecting. Another implicit cost to
consider is making the tax system relatively easy for the smaller firms so that
they can benefit from AGOA and other regional and international trade dynamics.
Make it easy for the people to access such markets.
Rationale
I imagine you are asking yourselves why should we go through all this trouble.
Well, the sector is the 3rd biggest employer of labour or the biggest employer
if you account for seasonality in other sectors. Employment in the sector is 80
per cent women and 20 per cent men. The sector contributes on average 11 per
cent to manufacturing output and on average 2.9 per cent to GDP in nominal terms
and accounts for over 50 per cent of the manufacturing sector’s labour
complement. A textile industry value chain can do for the country in terms of
job creation, poverty alleviation, youth and women empowerment.