By Jonas Nyabor/The Africa Report
US-China tensions are giving West African apparel makers the chance to position themselves as alternatives for major US fashion brands looking to diversify their supply sources.
The US African Growth and Opportunity Act (AGOA) opens the door to West Africa to fill the void created by uncertainties in existing US fashion industry apparel supply chains, DTRT Apparel co-founder Skip Richmond tells The Africa Report.
According to an industry association survey, at least 60% of apparel retail companies in the US have stopped sourcing from China. “This is a golden opportunity for Ghana and the whole of West Africa,” Richmond says.
In 2022, US apparel imports hit a record value of $100bn, with Africa contributing only $1bn. The continent’s contribution is dominated by Kenya, with around $500m, followed by Lesotho, with $300m. DTRT is West Africa’s biggest apparel manufacturer. Richmond says AGOA, which grants selected products from eligible countries duty-free access to the US market, will give the sub-region the leverage it needs.
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“In Ghana, we are just scratching the surface of what is possible in the industry,” he says. “Ghana is doing roughly $50m a year in apparel exports to the US, so there is a significant room just to catch up with Kenya, and beyond that, there is significant room to tap into the tens of billions of dollars being withdrawn from China.”
“Ghana and West Africa as a whole needs time and patience to build up that skill set to compete on a level playing field, and AGOA levels that playing field,” Richmond says.
AGOA extension needed
Kekeli Ahiable, a trade adviser at the Tony Blair Institute, says West Africa can be the next frontier for global apparel sourcing. The sub-region, she says, already produces more than a third of Africa’s total cotton and benefits from good port availability with short shipping times to the US. West Africa also offers cheap labour and duty-free regional trade, she adds. “If AGOA remains intact, West Africa has a chance to develop the first vertically integrated apparel industry on the continent,” Ahiable says.
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“West Africa has organic cotton and other raw materials; there are processing and production capabilities, and apparel manufacturing can be done with the ease of export through AGOA, which saves up to 32% in duty cost,” she says. “The sub-region is the last frontier for sustainable apparel production, and there are economies of scale because you have many of these activities happening in the same region.”
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Vertical integration, involving control of the production process from raw materials to finished goods, will be a crucial differentiator for West Africa. The approach enhances efficiency and ensures greater sustainability and resilience against external disruptions.
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While most US apparel retail companies see AGOA as an essential programme for their businesses, its temporary nature and renewal uncertainty create a disincentive for long-term investments and sourcing commitments.
With an AGOA extension to 2041 being discussed by US lawmakers, Richmond believes investors will be attracted to invest in West Africa’s apparel manufacturing industry. The move, he says, would give investors and brands “the confidence that they can invest in West Africa, and also increase sourcing from West Africa in a way that will lead to billions of dollars of business flowing into the sub-region.”
