...Over Jubilee Cloth Contract To China
... They Smell 10% Behind The Deal

Garment and textiles workers have accused the government of paying lip service to promoting made in Ghana goods.

The workers say their accusation is based on government’s decision to outsource a mass of the printing of the Ghana@50 jubilee cloth to Chinese textile companies.

Last Tuesday, the Minister of Presidential Affairs, Mr. Kwadwo Mpiani caved in to pressure at the meet-the-press and confessed that the Ghana@50 Planning Committee of which he is chairman imported most of the jubilee cloth from China.The minister blamed the government decision on the inability of local textile companies to produce the anniversary cloth in huge quantities to meet demand.

But the garment and textile workers claim the government actually ordered the clothes from China before submitting the designs to local textile companies this month, a replay of the Macmillan book contract, perhaps.

When reached for their comments, the managements of textiles manufacturers were tight-lipped for fear of victimization.

“You cannot believe it, for all these years we have been preaching against dumping of cheap textile from China; so the government’s decision to import the jubilee cloth from China is an endorsement of cheap imports”, Mr. Abraham Coomson , General Secretary of the Ghana Textile, Garment and Leather Workers Union told Public Agenda.

Mr. Coomson emphasized that GTP, GTMC, PRINTEX and ATL together could have produced any quantity of cloth needed for the entire country if they had been given the designs ahead of time. In his view Mr. Mpiani’s explanation that local industries lack the capacity to produce huge quantities is unacceptable. “The simple reason is that some people want to make money by awarding the contracts to Chinese companies, if it means local companies folding up”, Coomson lamented.

Public Agenda has learnt that the few contracts the local companies had, were awarded by some private textile distributors. All GTP had from government was a contract to print 3, 000 yards of the brand that bears the image of Dr. Kwame Nkrumah, while Printex only had a contract to print 10,000 pieces.

According to Coomson, the immediate consequences of the marginalization of local textile firms would be job losses. “If we are celebrating 50 years, we must be able to print our anniversary clothes, otherwise what are we celebrating?”, he asked and blamed the hitch on poor planning.

Ghana’s clothing industry has fallen victim to a flood of cheap Asian textiles, mostly from China. Now the sector that used to employ around 25,000 workers in the 70s and 80s now employs a mere 3000 workers country wide. The Ghana Textile Manufacturing Company, for instance, which used to employ 3,000 workers, now has a mere 150 on its payroll. The main casualties of the unbridled trade liberalization that has hit the textile sector are Freedom Textiles Ltd. Tema Textile and lately Juapong Textile. And the latest government decision only sounds the death knell of a sector that used to hold its own against foreign competition.

Textile industry watchers argue that if trade policies had been favourable to local industries, the alarming loss of jobs and livelihoods would have been minimal. Stakeholders say the onus is on the government to act quickly to save the textile industry which has the potential to create new jobs. But the decision to import even Ghana’s anniversary cloth from China is ample demonstration of how unresponsive government is to the plight of the manufacturing sector. So Ghana’s loss is China’s gain.

According to the Economist newspaper, Although Europe remains Africa’s biggest trading partner, its share has dropped from 44 percent to 32 in the last ten years, with China catching up gradually. China now takes over 70 percent of Sudan’s exports, compared with 10 percent in 1995. Burkina Faso also sends a third of its exports, almost all of its cotton to China, compared with virtually nothing in the 1990s. Equally important is the fact that Africa has now found in China more than a new buyer for its commodities. Besides, China is also emerging as a new source of aid and investment. China invested $900 million in Africa in 2004, out of $15 billion investment the continent received. It has also canceled several billion dollars of African debts.

In the diplomatic equivalent of speed-dating, Chinese Premier Wen Jiabao last week concluded another round of a seven-nation tour of Africa. He has been sweet-talking his hosts with pledges that China wants to promote development in Africa as well as boost two-way trade.

But there has been criticism of China’s sincerity - that its growing economic interest in Africa is based on a search for raw materials and cheap markets to power its economy. At first glance it is clear that many African countries have benefited from China’s frenetic economic growth.

African-Chinese trade has burgeoned since 2000 and was worth $40bn in 2005 - 35% more than the year before.

African exports to China are rising by more than 50% a year, as its commodity-rich nations have helped satisfy China’s demand for oil and raw materials.

Speaking in Uganda, Mr Wen - the third senior Chinese official to visit Africa in the last six months - said concerns about a so-called “Chinese threat” in Africa were inaccurate and irresponsible. China argues forcefully that the gains it is making in the textile sector worldwide is the result of years of investments in that sector to sharpen its competitive urge and gain the comparative advantage it now enjoys.

Textile and clothing products made in China have been gradually accepted by consumers from both developing and developed countries for their affordability and fine quality. This underlies the increasing market share of Chinese textile and clothing products”, says a Chinese embassy statement in South Africa.

The Chinese insist that the success of their textile industry can be attributed to the country’s positive response and timely readjustment in the face of difficulties instead of flinching and resorting to self protection. The Chinese say the country’s market expansion in textile and clothing market is nothing for the rest of the world to worry about because it is the integration of world trade which brought China this right. “Any restriction aiming at China will be a distortion to the WTO’s free trade principle which will definitely hurt Chinese people’s confidence to WTO and their enthusiasm for the new round. These unfair and discriminatory doings will never be accepted by China”, warned the statement.

In China’s bid to protect its right of surviving as a developing country, its booming economy is now beginning to hurt the economies of other poor and developing countries, since no country can make any strides in economic development without strong local industries.

Certainly, the new scrambler (China) for Africa has its good and bad sides, just as the previous scramblers (Europe) milked Africa dry and continue to do so. It is left with Africa to bargain properly, in fact protest against China’s unfair trade practices that are killing local industries. After the summit, both China and Africa should be winners.