Uganda’s textile industry picking up the threads

Museveni favours local textiles

Meeting the United States Undersecretary for Political Affairs, Thomas A. Shannon, at Uganda House in New York City on Sept. 22 during the 72^nd session of the United Nations General Assembly, President Yoweri Museveni said his government is against importation of second hand clothes because it is trying to develop its textile and apparel sector.

“Second hand clothes are killing the textile and apparel sector in Uganda. Industrialization of this sector is not only good for Uganda but for America as well. As partners the volume of trade grows and creates more incomes,” he said.

Museveni’s remarks were in response to the US Trade Representatives (USTR) earlier statements saying it was reviewing trade benefits to the region under the African Growth and Opportunity Act (AGOA).

This was after US traders in second-hand clothes complained about EAC plan to import used clothes arguing that the move would hurt their industry and also violate AGOA rules.

AGOA, which was extended last year, allows exporters from African countries that meet given terms, to export their goods into the U.S. without the usual tough restrictions. In turn, America also gets some preferential treatment of their products.

Right timing

This new development coincides with the government plans to revive its cotton industry, one of the country’s foreign exchange earners in the 1970s.

In addition, there has also been a surge in demand for cotton as raw materials from domestic mills and the potential to supply manufacturers producing clothes and textiles abroad.

At the moment, the country produces merely 110,707 bales per annum, grown in more than 60 districts in Busoga, Bukedi, Bugisu, Teso, Lango, Acholi, West Nile, and western regions employing thousands of Ugandan households.

With new investors joining the sector, amid government’s commitment to inject more cash in the sector, more Ugandans are set to get jobs right from the farm and in the value adding chains.

Uganda’s  textile industry was founded in the 1950s and 1960s, spearheaded by the Uganda Development Corporation (UDC) that worked  in tandem with the international partners, such as the Calico Printers Association of the United Kingdom and Yamato International of Japan, as well as domestic partners, such as Nyanza Textile Industries Limited (NYTIL) in Jinja, Mulco Textiles in Jinja, African Textile Mills (ATM) in Mbale and Lira Spinning Mill in Lira, according to Fredrick Lugojja’s  background paper prepared for the United Nations Conference on Trade and Development in March  this year.

Under the auspices of UDC, a National Textile Board was established in late 1960s to guide the development of the textile industry in the country, with a focus on import substitution.

This, Lugojja said, was followed up with the nationalisation of the textile firm in 1970’s and later liberalised in 1994 where government divested its shares in these textile firms.

“Nevertheless, in the early 1990s, the sector collapsed under the burden of obsolete machinery and other operational constraints, especially unreliable and expensive electricity,” he said.

As at May this year, there were only three operational textile firms in Uganda including Southern Range Nyanza Limited, an integrated textile and garment manufacturing unit based in Njeru, Buikwe District.

However, the textile firms are not operating at full installed capacity due to the high cost of production and low demand for locally produced fabrics and garments as a result of high competition from cheaper imports and second-hand clothes.

As a result, domestic consumption of lint remains low, at an average of 3.3% of the total lint produced. Idle spinning capacity also exists, in the form of the non-functioning Lira Spinning Mill.