BULAWAYO textile giant, Archer Clothing Manufacturers’ efforts to push for more exports into the United States (US) were hampered by Zimbabwe’s ineligibility under the African Growth and Opportunities Act (Agoa), an official has said.
BY MTHANDAZO NYONI
Agoa was signed into law in 2000 to offer tangible incentives for African countries to continue their efforts to open their economies and build free markets.
Archer managing director Jeremy Youmans told NewsDay that the country’s ineligibility in Agoa had made business hard to do in the US market.
“Exports of clothing continue to grow in all markets. We are pursuing opportunities in the US, particularly for our casual wear and safari wear,” Youmans said.
“However, with Zimbabwe still being excluded from the African Growth and Opportunities Act, which only about seven African states are excluded from, it is a hard sell economically due to no duty free exemption, and psychologically, as in the minds of many US buyers, they fear the political and reputation risk of dealing with Zimbabwe companies, whether we are on their sanctions list or not.”
Agoa offers sub-Saharan African countries that meet certain criteria duty-free export concessions on more than 6 000 tariff lines.
Since Agoa came into force in 2001, Zimbabwe has never been eligible for the market access offered under the legislation due to human rights violation and corruption, among others.
Currently, the country is the only non-Agoa nation in Sadc, and one of eight countries from sub-Saharan Africa’s 47 states that is ineligible.
Eligibility is determined by a country’s establishment, or continual progress towards creating a market-based and open business environment, combating corruption, eliminating barriers to US trade, and improving property rights, human rights, health care, and education, among other criteria.
Youmans said capital investment into the clothing factory would continue as cash flows allow.
He said the company intended to make substantial changes to make the production processes more efficient, which would help to create more competitiveness to achieve the growth.
Youmans said they would continue to be reliant on the cost of doing business coming down, particularly with labour costs and regulations.
“We are further developing our productivity related pay systems and also enhancing our working environments as it is only our workers who can produce the quality, competitive products we are becoming more and more renown for, and we recognise that,” he said.
“Clothing is a very competitive market internationally and every clothing factory in the world is fighting for the right to supply. So we must continue to compete on a price, quality and delivery basis, or we will not be able to survive, let alone grow.”