Textile Sector

Overview

Botswana's economic progress since independence has been one of the few success stories of the African continent. The discovery and prudent management of its diamond resources together with sound economic policies has elevated the country to the level where it is no longer considered poor. The country is a major exporter of diamonds with a relatively small manufacturing base. Therefore the textile and apparel sector has been identified as one of the sectors with potential in assisting the diversification process of the country.

Textile and Garment sector in Botswana

Botswana was in the early 1980's a small supplier of textile and clothing products in world markets compared with other major producers in the more developed industrial economies of the far east, North America and Eastern Europe. However, in the early 1990's the introduction of the Financial Assistance Policy (FAP) resulted in growth of this sector with many investors establishing companies in Botswana to service the South African market, US and European markets. Despite all this the industry still went through a difficult time with some companies closing down operations after the wage subsidy expired. This programme of assistance was therefore discontinued in 2001.

In 2001, Botswana qualified as a less developed country under the Africa Growth and Opportunities Act (AGOA) giving it preferential treatment in sourcing its raw materials for duty and quota free exports into the US market. In addition, Botswana's exports including textile and garments are admitted free of import duties to the European Union countries through the Cotonou Agreement.

Botswana goods also enjoy duty and quota free access to markets in South Africa, Namibia, Swaziland and Lesotho through the Southern African Customs Union which has a population of about 48 million. The Southern Africa Development Community (SADC) comprising 14 countries with a population of 200 million offers further market access opportunities.

In addition to the above, Botswana offers a very favourable climate which includes among others no exchange controls, no restrictions on repatriation of profits or capital and a number of incentives coupled with the advantage of the location since its in the centre of the Southern African region.

Investment Opportunities

Botswana has an opportunity to be an important supplier of textile products, principally garments. Other areas to be looked into include;

• Weaving
• Fabric knitting
• Accessories
• Towelling
• Pillows and Duvets
• Blankets etc.