DAVOS, Switzerland — South Africa will look to revive its troubled textile and apparel sector in a major initiative to be proposed in the country’s new budget, a senior government official said.
“We’re basically moving to introduce an incentive-scheme based on value-added in textiles and apparel,” said Rob Davies, South Africa’s minister of trade and industry.
Manufacturers would be given credits for investment and capital upgrades, he said in an interview during the annual World Economic Forum here.
The proposal, crafted after studies of South Africa’s textile sector, presents “a serious possibility not only for the survival of the industry, but to grow in some niche fashion segments, and manufacturers to have the possibility to adjust quickly to changing demands by retailers,” Davies said.
South Africa’s apparel sector has shed tens of thousands of jobs in the face of stiff competition from lower-priced Asian imports. In 2008, South Africa’s imports of textiles were valued at $1 billion and apparel imports reached $993 million, according to World Trade Organization data. The 49.3 million consumer-strong South African domestic market is expected to be the major market outlet for the sector upgrade products.
Davies declined to reveal the amount of funds that will be earmarked for textiles and apparel in the plan, but noted “it will be a fair sum of money.”
The incentives will be earned in productivity and investment upgrade, he said. The plan is expected to be unveiled during the budget presentation on Feb. 17, said Alan Hirsch, deputy director-general for policy coordination in the office of the president of South Africa, Jacob Zuma.
The plan also includes blueprints for large-scale infrastructure projects, green jobs and the development of other industrial sectors such as auto manufacturing and chemicals, Davies said.
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