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Business News of Monday, 27 February 2017

Source: B&FT

Textile industry in dire straits

The Chief Executive Officer of the UT Group, Mr. Martyn Mensah, has said the textile industry, which dominated the manufacturing sector of the country some years back, has seen a 90 percent decline in its contribution to employment.

He said in 1970, at its zenith, the textile sub?sector dominated the manufacturing sector in Ghana with 16 textile manufacturers which employed 25,000 people. The sad story of the textile industry, he said, is that there are only four players left, operating at different levels of activity, and they currently employ a mere 2,900 Ghanaians; a 90% decline in its contribution to employment over a period of 50 years

Even surviving companies Akosombo Textile Limited (ATL), Tex Style Ghana Limited (GTP), Printex and Ghana Textile Manufacturing Company (GTMC) are struggling in the face of competition from cheap, pirated imports.

It is reckoned that in 2011, the ratio of imported textiles to exported textiles in Ghana stood at 125 percent that is the country imported 25 percent more textiles than it exported. By 2015, the excess of imported textiles over that exported stood at a staggering 827%!

Speaking at the 90TH Anniversary of the Achimota School dubbed “Achimota Speaks” programme, Mr Mensah said “the only conclusion is that from where we stand today, textile manufacturing will not be making any further meaningful contribution to the nation’s development.”

He said this is the sad state of affairs of a sector that had the potential to catalyze the development of a powerful supply chain linking cotton?farming to ginning, yarning and spinning and connecting to dye manufacturing and then linking forward to exporting as artisanal and commercial local clothing manufacture.

“The question is whether the case of the demise of the Ghanaian textile sub?sector is what

the future holds for other sectors of our economy? Will other sectors add to or subtract from our efforts to develop Ghana?” he asked.

The gravity of where this sector finds itself today should not be lost on us. When we promote the wearing of made in Ghana clothing, could we unwittingly be driving the demand for imported fabric much of which is of dubious provenance?

The textile industry cannot be overlooked when discussing the country’s manufacturing sector. The industry, which was once the leader in Ghana’s industrial sector, has been declining over the years largely due to trade liberalization policies and programmes.

This has resulted in the proliferation of fake imported textiles into the country which is usually sold at cheap prices compared to the ones produced locally.

This situation has led to about 60 percent reduction in the production capacity of the textile industry and has contributed to job losses.

Without the gift of precognition, it can really be just a roll of the dice as to what state our country will be in by the year 2030. One thing is sure, the world around us is changing at such a

breakneck pace that in 13 years would seem like a lifetime of change.

Effects on youth unemployment

Even though Ghana does not have a reliable and comprehensive unemployment data, available statistics shows that about 300,000 young people enter the labour market every year. The formal sector is only able to engage less than 6000 (3%), leaving more than 97 percent to survive in the informal sector or out rightly, unemployed.

Research further indicates that Ghana’s population has a youthful structure with the youth defined officially as aged 15 –24 years, constituting about one out of every four of the population.

Over the past forty years, the number of the youth in the total population of Ghana has increased from 1.1 million in 1960 to 2.3 million in 1984 and to 3.5 million in 2000. The latter constitutes about 22.6 percent of the economically active population.

The above statistics creates a very worrying situation looking at the present state of the country’s manufacturing sector which is supposed to engage the majority of these youths in gainful and productive activities.

This therefore depicts that; government must take practical steps to bring this problem, which has the potential of threatening the national security of the country as was experienced some time ago with the “Arab Spring” situation that caused a lot of disturbing consequences.