Textile manufacturers in Ghana face competition from Asian imports

The textile industry in Ghana was once a leading player in the country’s industrial sector, employing about 30,000 workers. That number is now closer to 3000 and dropping steadily. The decline is largely due to competition from cheap imports, predominantly from Asia, which is making it difficult for Ghanaian textile producers to prosper in the market.

“The main challenge is the influx of pirated copies from Asia. They are copying our designs, using our brand names and dodging paying any taxes,” Cecil Evans-Chinery, national wholesale director at Premium African Textiles, which is responsible for the distribution and marketing of goods made by textile manufacturer GTP, told OBG.

According to Evans-Chinery, markets across Ghana are filled with sellers offering cheap knock-offs produced in Asia and then smuggled into the country. “Those people bringing in Chinese goods are evading paying duty so they can give even lower prices. We bring out a design, and it is quickly copied and on sale in four to six weeks, and often these products cost half of our wholesale price,” he said.

Key Players

From over 20 large textile companies in Ghana in the 1960s there were just four major players in the industry in 2015: GTP, Ghana Textile Manufacturing Company, Akosombo Textile Limited (ATL) and Printex. ATL, previously one of Ghana’s largest textile firms, has been in distress for several years, according to local media reports. The industry’s total output dropped from 118m metres in 1977 to 38m metres in 2011, according to available data from the Textiles, Garments and Leather Employees Union, and most of the remaining larger textile companies are now foreign owned. GTP is held by Vlisco, a company based in Holland that is owned by a British private equity group, while ATL is owned by Hong Kong-based Cha Group. Printex remains locally owned.

Forward Steps

In July 2014 Ghana’s Ministry of Trade and Industry (MoTI) inaugurated a 17-member taskforce to seize pirated Ghanaian textile designs. The taskforce – which follows in the steps of an earlier unit that was largely ineffective – consists of members from the MoTI, Ghana Police Service, National Security Council, Ghana Revenue Authority, Ghana Standards Authority, Accra Metropolitan Assembly and Ghana Chamber of Commerce and Industry, as well as representatives from major domestic textile manufacturers and trade unions.

“This is the first time they’ve really empowered the taskforce,” said Evans-Chinery. In January 2015 the body destroyed 3500 items of confiscated pirated textiles. “Since December 2014 they’ve been very active, but it is not yet affecting imports. Once they get to the first outlet someone calls around and all of the others remove their pirated clothing,” said Evans-Chinery. At the taskforce’s inauguration it was also announced that textile manufacturers would be able to receive financial support from the Export Development and Agricultural Investment Fund, while the government would strengthen the Ghana Revenue Authority’s Customs division so that it could seize more pirated designs as they entered the country.

Exports Potential

The government is also working to support textile exports. In September 2014 President John Dramani Mahama visited Dignity DTRT, a Ghanaian-US joint venture that produces T-shirts and other garments for the US market, and told those present that the government was taking steps to support the domestic textile industry, as well as help it gain a footing in the international market. In March 2015 the Ghana Chamber of Commerce and Industry signed a letter of collaboration with USAID’s West African Trade Hub and African Partners Network, with the ultimate goal of facilitating strategic investments for the expansion of exports, with textiles highlighted as a key segment that could benefit. The regional trade centre will also offer Ghanaian producers technical help and professional assistance.