GENEVA — African countries are losing ground in labor-intensive manufacturing such as textiles and apparel, said a new report by two United Nations agencies.
Labor-intensive sectors such as textiles and apparel “play a rather limited role in African manufacturing today, both in terms of domestic manufacturing production, as well as exports,” said the report from the Vienna-based U.N. Industrial Development Organization and the Geneva-based U.N. Conference on Trade & Development.
The “Economic Developments in Africa Report, 2011” concludes that such manufacturing activities, normally the entry step in industrial development, account for only about 20 percent of the continent’s value-added manufacturing, noting that its share dropped to 20 percent in 2009 from 23 percent in 2000.
The study claims that a large part of this change is due to the decline in the share of textiles production, down to 5 percent in 2009 from 7 percent in 2000. The share of apparel manufacturing also dipped to 4.3 percent in 2009 from 4.7 percent in 2000.
The report also shows that labor-intensive exports declined to 18 percent share of Africa’s manufacturing exports, down from 25 percent in 2000, and points out that in the same period in East Asia they rose to 26 percent from 17 percent.
Kandeh Yumkella, UNIDO director-general, told reporters that Africa had lost ground in textiles and apparel “because the cost of doing business is just too high,” citing transaction costs and bureaucratic red tape. The costs of water and electricity, and widespread power cuts has resulted in the loss of small mills in many countries, he added.