After unprecedented decline in Kenya’s cotton-textile-apparel industry since the early 1990s, substantial interest in its revival has emerged. This interest has largely been stimulated by the market opportunity presented by the United States’ African Growth and Opportunity Act (AGOA) of 2000 and the potential of the industry in poverty alleviation. Within only two years of qualifying for AGOA, Kenya’s exports of clothing, and investment in the textile sector, have experienced remarkable growth. This study explores the prospects of this growth continuing after 30 September 2004, when Kenya will be required to source raw materials either locally, from other AGOA eligible sub-Saharan African (SSA) countries, or from the US. Using secondary and primary production, trade and other types of data relating to the entire cotton-textile-apparel chain, this study looks at the issues involved and examines the prospects of each of the various options available to the country. The study shows that none of the three options is feasible to Kenyan apparel producers as things stand now. High quality fabric and yarn are available from the US but sourcing them to make apparels will at least double the unit cost of apparels and make them uncompetitive. Kenya has a cotton-textile-apparel supply chain in place but only the garments part of it can be said to be thriving and fairly competitive. Many apparel firms are already exporting to the US, which is impressive considering the stringent requirements of that market. All the other parts of the chain, however, are very disorganized, weak and lack adequate capacity, largely due to infrastructure, market, and policy constraints. Cotton production is insufficient and the capacity to produce high quality and competitive fabrics is lacking. The option of sourcing fabric and/or yarn from other AGOA-eligible SSA countries is limited by the fact that the region does not meet the fabric requirements of its apparel sub-sector due to various supply constraints. Moreover, the fabric produced locally and regionally falls short of the variety and quality demanded by the US market. For Kenya and the rest of SSA, the solution lies in sourcing fabric from the local cotton-textile industries, or the region through collaborative and strategic regional cotton-textile supply chains. For quality fabrics to be supplied locally and competitively, substantial capacity building in the lower parts of the cotton-textile chain is required. Critical inputs into this capacity building include establishment of an apex stakeholder institution to coordinate the industry and provide necessary regulation, cost-reducing interventions at all points in the chain, incentives to stimulate investment (at the ginning, spinning and fabric finishing parts of the supply chain), improved macroeconomic management, identification of niche markets, and accumulation of the necessary capital and skills.
|Title of host publication||Clothing and footwear in African industrialization|
|Editors||D. McCormick, Chr. Rogerson|
|Publisher||African Institute of South Africa|
|Number of pages||649|
|Publication status||Published - 2004|