Interestingly the textile industry has been one of the catalysts for growth in these Asian countries and could be the same for Kenya.
There is however a twist. The garment manufacturing sector is gradually slowing down among the Asia tigers—promising opportunities for other markets such as Kenya where aspects of production cost such as labour inflation remain slightly lower.
China which has for a long time been the world’s leading apparel manufacturer is adopting a service economy, leaving countries like Kenya to fill the void.
Analysts predict that China will shed about 85 million jobs at the bottom end of the manufacturing sector between now and 2030.
“Today, as production costs rise in Asia, Sub-Saharan Africa offers the last frontier in the search for new apparel sourcing markets. With a strong apparel tradition, a large and entrepreneurial workforce, and an attractive business environment, Kenya is a compelling new sourcing,” a new study report on the Kenyan textile and fashion industry says.
This opportunity coupled with the apparel exports under the African Growth and Opportunity Act (AGOA) — a United States preferential market access deal for qualifying sub-Saharan countries, improved infrastructure and cheaper power bodes well for Kenya garments sector.
Fortunately for Kenya, its textile industry is just picking up after decades of a slump due to mismanagement and stiff competition from cheaper imports and second-hand clothes.
Data from the Kenya National Bureau of Statistics (KNBS) showed that Export Processing Zones (EPZ) recorded a 12.1 per cent growth in sales in 2015, underlining a resurgence of the sub-sector that is expected to be a key pillar of Kenya’s development.
The growth was mostly driven by apparel exports under AGOA.“In 2015, enterprises operating under the Export Processing Zone (EPZ) programme recorded increase in employment, exports, imports, and expenditure on local goods and services,” The Economic Survey 2016 states.
“Total EPZ sales went up by 12.1 per cent from Sh57.2 billion in 2014 to Sh64.1 billion in 2015. The number of local employees increased by 8.7 per cent to 50,523 persons in 2015. The bulk of employment was in the garment/apparel enterprises with a total of 41,548 persons mainly due to expansion of existing apparel, and agro-processing firms.”
The changes in Asia give Kenya a chance to grow its textile export volumes and designs in the global scene.