Textiles and Apparel
closed or are for sale, including Swarp Spinning Mills. As of 2010, there were only eight garment enterprises left in the country. The Zambian textile and garment industry is now struggling to survive. Imports of secondhand clothes have contributed to the industry’s decline. Most of the surviving companies now spin yarn from locally grown cotton for export, while others are producing woven and knitted fabrics for the domestic market, but at far below capacity. Competitiveness and Binding Constraints The seemingly vibrant textile and garment sector of the 1980s, which employed many Zambians at high wages, was kept alive by government subsidies and the high tariffs that sheltered state-owned firms from external competition. Once these supports were removed, the cost structure of many enterprises was exposed as uncompetitive. The government’s failure to control the imports of donated secondhand garments proved disastrous for the Zambian garment industry. Secondhand garments from the West flooded the Zambian market.10 This market grew a remarkable 600 percent over 15 years, as charitable clothing donations (Goodwill Industries, Oxfam, the Salvation Army) were sold by for-profit brokers, exporters, and used clothing resellers, all of whom charged a markup. Although the quality of locally made clothes is better, consumers opt for the cheaper imported products. Instead of relying only on market forces, the Zambian government could have petitioned the WTO or introduced safeguard legislation to allow temporary duties to be levied on the imports that were flooding the market. Besides the secondhand clothes and the volatile macroeconomic environment, poor trade logistics, low labor efficiency, and high input costs have been the key binding constraints on Zambia’s textile industry (Dinh 2013). Poor trade logistics. Zambia is landlocked; so, imported inputs and all exports have to be transported through the ports at Dar es Salaam or Durban (more than 1,900 and 2,100 kilometers from Lusaka, respectively). The country’s ranking on the trading-across-borders component of the World Bank’s doing business index illustrates the challenges.11 In 2012, because of the significant time and cost requirements to import
411