Since Covid-19 knocked on our doors in March, our economy has been shaken to its core, featuring quarterly GDP contractions of 51% and skyrocketing unemployment rates. Last week, newly released data showed that 42% of working-age South Africans are jobless. Of them, just over half (23.3%) are looking for work. The rest has given up the search.
This is nothing short of a tragedy, and looking at how things are unfolding, the rest of the year doesn’t bode well. Whereas the situation has improved since the lockdown restrictions were lifted to level 1, businesses, including some of our country’s most established and prolific brands, continue to downscale and close their doors.
One small but powerful solution is for everyone in this country to go the “local is lekker” route and feed the economy from within, as consumers and businesses owners. Buying proudly South African goods, services, and products is one of the most powerful tools every entrepreneur and consumer – give or take 37-million adults – has at their disposal to bring about change.
Spending our money on locally manufactured clothes, food, and household items instead of opting for imports keeps proudly South African business doors open and people employed.
The problem is that in a price-sensitive country such as ours, where nearly half of the population lives on or below the bread poverty line, not everyone is in the position to choose local. Take textile products, something everyone needs. Often, South African clothing is more expensive than items carrying “Made in China, Bangladesh, Vietnam, and India” labels.
Contrary to popular belief, corporate greed has little to do with it.
From professional and first-hand experience, I can tell you that many South African clothing manufacturers are not making millions. Companies are often forced to produce at a break-even point, or even at a loss, to keep their employees in a job. Sweet-Orr, the company I work for, has done it. With 150 years under our belt globally, of which 90 years were spent in South Africa, we are fortunate to have had a buffer to navigate uncertainties. Going forward, many others won’t, which has disastrous implications when facing unforeseen expenses involving, for instance, the replacement of a piece of awfully expensive machinery or a leaking roof.
Our current textile situation stands in sharp contrast with the not-so-distant past. Before our first democratic elections, South Africa’s clothing and garment industry was a roaring economic powerhouse, accounting for a quarter of a million jobs in the early 1990s. This was not because companies were producing well-priced and high-quality clothing at an extraordinary efficient pace, but because there was no competition. The country was, after all, in global lockdown, for all the right reasons, providing built-in protection for local businesses.
This changed when our borders opened, allowing us to escape isolation and join the global economic battlefield. Soon, imported goods — fabrics and clothing included — started to trickle in, kick-starting a process of competition. Being produced at a much faster pace at lower prices by cheaper labour with cheaper raw materials provided good news for South African consumers, especially the poor.
In the meantime, measures were put in place to protect vulnerable industries such as fabrics manufacturing, including a 22% import duty on imported raw fabrics.
Regardless of those interventions, and in line with global trends, many South African textile mills have started closing down as a result of the increased competition from elsewhere. Fortunately, we have a number of strong suppliers left, allowing us to continue to support local businesses where possible. Besides building our local economy, sourcing raw materials closer to home as opposed to importing them, reduces lead times, thus price, as we don’t have to deal with currency volatility, either.
That said, fabric manufacturers closing down has affected the availability of options and has been and continues to push other local clothing manufacturers in the arms of more expensive imported fabrics. This results in more expensive garments. The higher the price of your raw materials, including chemicals and yarn, the pricier your end-products. All of this is compounded by a weak and unstable rand.
Of course, quality also plays a pricing role, too. The better the product, the higher the price. The problem is, however, that in a country like ours, quality is a nice-to-have. What is written on a price tag is what keeps customers on your side, not whether a pair of jeans lasts two or more seasons. The Covid-19 pandemic has only intensified, making buying proudly South African clothes infeasible to most.
A final pressure point is that despite various import regulations, the local market is being flooded by incredibly cheap clothing manufactured in other parts of the world, making it pretty impossible for local manufacturers to compete. The influence of international fast-fashion giants isn’t helping. Quite a few clothing companies have therefore moved the bulk of their operations outside the country to keep their costs low, with only a local office or a small manufacturing plant remaining. The question is: can you still call yourself a proudly South African business if most of your products are manufactured elsewhere?
I, nevertheless, believe we can revive our clothing and textile industry to its former glory, allowing it to manufacture affordable and quality products that create and sustain jobs, grow businesses, and attract foreign direct investment. We have the infrastructure, talent, and a population that is eager to work.
The government seems to be on the same page. With its new Textile, Footwear and Clothing Master Plan, it intends to increase the proportion of locally produced fashion sold in stores from 44% to 65% by 2030. This could create 120 000 extra jobs, bringing the number of employment opportunities across the industry’s value chain to 330 000.
To make the master plan work, we need to do things differently. South Africa won’t be able to stitch a better shirt, or a protective overall, if it insists on using the same thread that keeps snapping.