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African countries is a threat for Bangladesh apparel export

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TF Local Desk

africa-threat-for-bangladeshBangladesh will not be allowed duty benefits to developing and developed countries once the country graduates to the middle-income bracket. So, in recent years, nearly a dozen Bangladeshi garment makers have invested either in joint ventures or individually in different African countries, especially Ethiopia and Kenya. Ironically the upward trend of garment exports from Africa, thanks in part to Bangladeshi investors, poses a threat to Bangladesh’s position in the global apparel trade. Bangladesh holds the second position.

African countries enjoy duty-free and quota-free access for certain goods, including garments, to the US under the African Growth and Opportunity Act (AGOA). In 2016, garment exports from 39 sub-Saharan nations stood at 2.6 billion dollars. Shipments may cross the three billion mark this year. One of the major reasons for booming garment exports from the African nations is investment by Bangladeshi garment makers to avail duty privilege under the AGOA.

Over the next decade, should this scenario play out, East Africa’s export volumes could approach countries such as Mexico or Pakistan on apparel industry league tables. The impact of the upward trend of exports from AGOA nations has already started to show on Bangladesh’s apparel exports: for the first time in 15 years, the growth was not even in single digits in 2016-17.

 

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