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High Business Costs Hurt Kenya’s Textile Sector

As manufacturers continue to turn to Africa as a new sourcing destination, Kenya is struggling to keep costs competitive to attract investors.

According to Kenya’s The Star, the country’s high cost of doing business, coupled with a sometimes subpar business environment owed to political insecurity and gaps in the cotton value chain, are impeding the sector from success and sending buyers to neighboring countries for sourcing.

In Kenya, cotton is mostly grown by small farmers. The African Cotton and Textile Industries Federation (ACTIF) recently unveiled a farm-to-fashion value chain campaign, called Origin Africa, that is intended to establish the continent as a preferred sourcing locale for textiles and apparel.

But according to ACTIF executive director Rajeev Arora, ginners and spinners need to be equipped with better technology before they can reasonably compete in the world market.

“Our biggest problems include obsolete technology and equipment that was introduced almost a century ago,” he told The Star.

ACTIF chairman Jaswinder Bedi has asked the Kenyan government to create an upgrade fund that would help reduce the high cost of cotton and textile production in Kenya and increase the industry’s competitiveness, according to All Africa.

“African countries like Kenya are currently drawing attention as a preferred sourcing destination due to the rise in labour costs in China and other key textile sourcing markets,” Bedi told All Africa. And reviving the cotton sector at a time like this could create 500,000 jobs by the end of 2015, he added.

But first, Kenyan business must get into the international market to attract investors. According to Cyrille Nabutola, chief executive of the Export Processing Zones Authority, “Our [Kenyan] products are of the required standards and quality to compete in the international market, therefore as a nation, we should get our fashion businesses to woo and gain those markets,” The Star reported.

The Kenyan government has pledged to focus its efforts on reducing energy costs for manufacturers and improving infrastructure to help restore Kenya’s potentially promising textile industry.