Kenya and Rwanda are among the countries in talks with Afreximbank for funding to invest in their textile sector as the continental lender targets new value addition investments to replicate Benin’s success story.

This is part of the bank’s blueprint to reverse Africa’s $50 billion import bill for cotton products in the next 15-20 years.

Kenya and Rwanda will be supported alongside Nigeria, where the lender has a commitment of $2 billion for the West African economic giant to transform its textile sector, under the bank’s financing programme that targets cotton producing countries dubbed the “C-4+” – Benin, Burkina Faso, Chad, Mali, and Cote d’Ivoire.

The continental lender seeks to build on the success of its investments in Benin to construct special economic zones dedicated to cotton processing and other industries. In Benin, the Afreximbank-supported special industrial zones (SIZs) have produced globally competitive textiles, supplying quality cotton to global brands like Nike, Zara and H&M.“We are in Cameroon, in Chad, advancements have been made in Cote d’Ivoire, and in Mali. We have commenced active discussions with Kenya and Rwanda and Nigeria, and other countries across the continent,” said Afreximbank President George Elombi.

Mr Elombi said at the recent World Trade Organisation ministers conference in Yaounde, Cameroon, that the lender currently has a balance sheet of $50 billion – set to rise to $56 billion by the end of this year – with $11 billion in cash sitting in the bank waiting for projects to finance.“So, money is not the issue, the political will is,” he said, challenging African trade ministers and civil servants to make decisions that support cotton value addition.

He was speaking in reference to the new phase of the WTO Cotton Partnership initiative – best known by its French translation – “Partenariat Pour le Coton” (PPC), which was launched during the conference.

The initiative focuses on mobilising investment to accelerate the transformation of the cotton-to-textile-and-garment value chain in West and Central African producing countries.

The initiative – worth $5 billion in investments to support the textiles value chain – targets Benin, Burkina Faso, Chad, Mali, and Cote d’Ivoire, seeking to create 500,000 jobs and generate $10 billion in import substitution from the African cotton sector by 2030.

In East Africa, Kenya has the most advanced cotton industry, with earnings of $540-$600 million annually in exports, primarily driven by apparel exports to the US under the African Growth Opportunity Act. But the country imports about $2.2 billion worth of textiles per year.

In 2019, Afreximbank began supporting SIZ development in Benin, and the transformation of the sector has seen growth by more than twenty times in export revenues alone, delivering a cotton industrialisation reality that could be a model for other African economies.

Benin produced 40,000 tonnes of cotton, which generated about $40 million in export revenues. After the creation of special economic zones, the evidence shows that one kilogram of cotton produces four t-shirts, each retailing for $4-5.

Therefore, 40,000 tonnes now generate about $800 million in export revenues, Elombi sais.

But the trade ministers conference in Cameroon did not offer what Africa’s cotton-producing economies expected. Talks on issues surrounding cotton in particular, and agriculture in general, collapsed yet again.

According to Faith Lumonya, Africa and Arab countries coordinator at Public Services International, the global union representing millions of workers across 700 trade unions, Africa left the same way it has at previous conferences, without a decision on agriculture.

The demand by the West African cotton-producing nations that the longstanding issue of trade-distorting cotton subsidies be resolved was disregarded by the US, which pushed for a “new approaches” negotiation formula.

The issue of cotton subsidies has been an ever-present concern for Africa since the WTO’s sixth ministerial conference in Hong Kong in 2005.“We must protect our nascent industries from unfair competition by heavily subsidised industries elsewhere,” Mr Elombi said, adding that unless African trade ministers act boldly and fearlessly to reject trade-distorting subsidies, the continent will not reclaim even a quarter of the $50 billion import bill.

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