Garments and Textiles Strategy f

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					                          August 2009




Garments and Textiles Strategy for Malawi




                          NATIONAL
                          WORKING GROUP
                          ON TRADE POLICY
                          (NWGTP)
                          P.O. Box 31764, Chichiri, Blantyre 3, Malawi
                          Tel.: +265 (0) 1 880 759
                          Email: secretariat@nwgtp.mw
                                                      CONTENTS

SECTION                                                                                                                          PAGE


INTRODUCTION AND THE RATIONALE FOR A GARMENTS AND TEXTILES
DEVELOPMENT STRATEGY ................................................................................... 3

OVERVIEW OF SECTOR .......................................................................................... 4
 Background ............................................................................................................ 4
 Textiles ................................................................................................................... 5
 Garments (Apparel) ................................................................................................ 5

CURRENT SITUATION IN MALAWI ......................................................................... 7
          Cotton Production in Malawi ...................................................................................................... 7
   A Key Determinant of Growth: Malawi Performance under AGOA ......................... 9
          Apparel and Textiles Exports to the USA................................................................................... 9

KEY CONSTRAINTS AND CHALLENGES ............................................................. 11
 General Challenges .............................................................................................. 11
 Sector Specific Challenges ................................................................................... 11
 Key Constraints .................................................................................................... 11

SWOT ANALYSIS ................................................................................................... 13

STRATEGIC OBJECTIVES ..................................................................................... 14

ACTION MATRIX ..................................................................................................... 15
          Matrix of reforms in the Garment and Textile Sector ............................................................... 15




                                                                   -1-
                                 ACRONYMS



AGOA     African Growth and Opportunity Act
ACTIF    African Cotton and Textiles Industry Federation
CMT      Cut, Make and Trim
COMESA   Common Market for Eastern and Southern Africa
COSATU   Coalition of South African Trade Unions
DWSM     Mapeto (formerly David Whitehead and Sons Ltd.)
EPA      Economic Partnership Agreement
EPZ      Export Processing Zone
FTA      Free Trade Area
GTMA     Garment and Textiles Manufacturing Association
MCCI     Malawi Chambers of Commerce and Industry
MDPC     Ministry of Development, Planning and Cooperation
MEPC     Malawi Export Promotion Council
MGDS     Malawi Growth and Development Strategy
MIPA     Malawi Investment Promotion Agency
MIT      Ministry of Industry and Trade
MMTZ     Malawi, Mozambique, Tanzania and Zambia
MoEST    Ministry of (Higher) Education, Science and Technology
MoF      Ministry of Finance
NWGTP    National Working Group on Trade Policy
RSA      Republic of South Africa
SACU     Southern African Customs Union
SADC     Southern African Development Community
TEVETA   Technical, Entrepreneurial Vocational Education and Training Authority




                                        -2 -
INTRODUCTION

In an effort to realize the Malawi Government’s vision to refocus the economy away from
importing and consuming towards exporting and producing, attempts are being made to
diversify the country’s export base beyond the traditional exports of tobacco, tea and sugar.
The cotton, garments and textiles industry is a targeted sector in the Malawi Growth and
Development Strategy (MGDS).

The Malawi Growth and Development Strategy (MGDS) is the Malawi Government’s
medium-term policy framework, designed to reduce poverty through sustainable economic
growth and infrastructure development. In the cotton sub-sector, the medium-term
outcome from an “integrated cotton industry” is increased production of garments made
from locally woven cotton cloth as opposed to imported synthetic fabrics.

While the garments and textiles industry is featured in the MGDS, a well-defined sector-
wide development strategy remains to be realized. Since MGDS guides resource allocations
through the budget, the garments and textiles sector can attract investment resources, both
domestic and foreign, if its place in the country’s priority sources of growth (within the
MGDS) is appropriately highlighted. Informing the MGDS resource allocation process is,
therefore, one of the target objectives of this strategy.

The trade agreements (AGOA, EPA, SADC, COMESA and the RSA/Malawi Asymmetrical
Bilateral) require this symbiotic relationship and the need for ready access to local yarns and
fabrics. It is the desire of Malawi’s trading partners to expect a country such as Malawi to
have a fully integrated and effective value chain.

COMESA, in conjunction with the African Cotton and Textiles Industry Federation (ACTIF),
has developed a cotton – clothing strategy1 that requires the participation of member
countries, including Malawi. It would be prudent to liaise with the COMESA Secretariat to
ensure that Malawi’s strategic requirements are incorporated in the regional strategy
document and that the performance indicators included for monitoring and evaluating
strategy implementation are applicable to Malawi. Malawi will consequently be able to
benefit from economies of scale at the regional level in terms of institutional development,
marketing and additional investment in the industry.



THE RATIONALE

For Malawi to continue to become an exporting nation, a well-developed textile and
garment sector strategy must be a subset of the MGDS, alongside a) the development
infrastructure (transportation networks, power generation and transmission, port facilities
and information communication technology), b) skills required in the industry and c) inputs
for related industries in the value chain as the key foci.


1
    Regional COMESA Strategy for Cotton – Clothing Value Chain, March 2009.


                                                           -3 -
OVERVIEW OF THE SECTOR


Background

Primarily a domestic market industry in the 1970s and 1980s, the garments industry shifted
its orientation to exports in the 1990s, spurred by privileged access to South African markets
through the asymmetrical bilateral trade agreement and under-utilized quotas granted by
the USA2. South African firms outsourced their Cut, Make and Trim (CMT) operations to
Malawi, taking advantage of the preferential, asymmetrical, bi-lateral trade agreement
(provided 25% of the production costs of the imported goods were added in Malawi). This
agreement came under threat in 1999 following allegations of “smuggling,” trans-shipment
and “other customs fraud” lodged by the South African government and internal lobbying of
COSATU (Coalition of South African Trade Unions) and certain, large garments and textile
manufacturers in South Africa (Malawi had more than 20 garments factories in 19983).

By 2000 bilateral trade with South Africa had virtually ceased, with 9 Malawi-based
producers closing down4. Under the SADC Trade Protocol, the terms of trade with South
Africa were renegotiated. However, implementation of the SADC Free Trade Area (FTA) was
delayed, which rendered Malawi an even less attractive destination for CMT operators.

Furthermore, a special arrangement in the SADC Trade Protocol allowed the MMTZ
countries to export garments which had not undergone a double stage transformation5.

In 2000 the US government enacted the African Growth and Opportunity Act (AGOA),
designed to enhance access to U.S. markets for 39 Sub-Saharan African countries. Originally,
the Act removed import tariffs for the eight-year period between 2000 and 2008, but in
2004 was extended to 2015.

These agreements presented a lifeline to the industry in Malawi.

In 2005 the Multi-Fibre Agreement (MFA) expired, removing limits on exports of garments
and textiles that had restricted the textile sales of industry giants such as China, India and
Pakistan. Malawi, previously unaffected by the MFA quotas, suffered as its share of the
international market decreased due to enhanced competition.




2
  Peter Coughlin and Samuel Undenge, ‘Study of the Textile and Garment Industries, Malawi’ a study commissioned by the
Southern African Development Community, 2001.
3
  Malawi Private Sector Partnerships: ‘Briefing Note I: Textiles and Garments Sector Value Chain’ January 2003
4
  Bentax, Fashion Clothing, Fashion Fabric, Imperial Clothing Co. Lilongwe Textiles, Malaya Clothing, Nuline Fashions,
Rainbow Clothing. TGVC Briefing note (original source: Garment and Textile Manufacturers’ Association of Malawi).
5
  Double stage transformation: Requires a product to undergo two distinct changes in the value addition process allowing
two distinct changes in tariff headings. (i.e. yarn through a process of spinning to textile and textile through a process of
CMT to garments)




                                                             -4 -
Textiles

The production of textiles within Malawi has suffered a series of setbacks. Malawi has one
significant spinning factory, Mapeto (DWSM) Ltd. (formerly David Whitehead and Sons Ltd.
(DWS). The operation began in 1967 as a joint venture between the government of Malawi
(51%) and the Lonrho group (49%). In 1994 Lonrho sold its shares to the Government. By
1999 DWS was struggling and went into receivership in 2002. Production had fallen from a
peak of over 30 million metres per annum in the early 1980s to well under a million meters
in 2002.6

An influx of cheaper imported fabric, a difficult business enabling environment and
management problems in David Whitehead precipitated the poor performance of the textile
factory. The local garments manufacturing industry was affected by both cheaper imports
of garments as the process of regional integration and trade liberalisation progressed. This
was further compounded by the importation of second hand and end-of-line clothing
(kaunjika).

In 2003 the Privatization Commission reached an agreement to sell DWS to Mapeto
Wholesalers and the Jimtex Consortium. After a difficult process, another review and the
sale being protested by various stakeholders the sale was eventually approved. DWS
production has remained low mainly due to poor state of and maintenance on machinery,
probably due to inadequate working capital to finance replacements. This situation has
continued with only marginal improvements in production.

Garments (Apparel)

The garments industry is dominated by a small number of large exporting manufacturers.
These firms operate in Export Processing Zones (EPZ), which exempts them from taxes and
import duties on equipment, but require all output to be exported. One constraint is that
rejects can not be sold on the domestic market. Local companies subcontract for the larger
exporters such as Win Win and Giant Clothing. Primary export markets are South Africa and
the USA.

All textiles and accessories (zips, fastenings and elastics) are imported from China, Pakistan,
Taiwan and South Africa. This creates rules of origin difficulties for where more than one
tariff heading change is required under cumulation.

A number of firms produce clothing for the domestic market. Imports of second-hand
garments (kaunjika) have captured a significant share of the market, thereby undermining
local producers who cannot match the low prices of these imports. This should be
considered within the current campaign to ‘Buy Malawi’: though import substitution may be
desirable, the constraints within local production must be overcome. Local producers are
now focusing primarily on industrial clothing but there remain domestic market
opportunities (e.g. school uniforms) to be exploited.



6
    ‘Cotton – Textile – Apparel Value Chain Report Malawi,’ The RATES Center, Nairobi, Kenya, July 2003, p.15.


                                                              -5 -
There are many small-scale tailoring enterprises that produce well-made, technically
sophisticated clothing. These micro and small business are constrained by the shortage of
working capital, marketing and management skills.




                                           -6 -
CURRENT SITUATION IN MALAWI




In 2005 textile and garment exports represented only 6 percent of total merchandise
exports in Malawi, while cotton fabrics represented less – only 3 percent.7 With
merchandise exports for the year totalling MK58.8 billion, textile exports amounted to
slightly over MK3.5 billion. Since 2005 this figure has declined.

Over 95 percent of all domestically grown cotton is exported.8 Over the past 5 years, cotton
production has increased by 50% to nearly 77,000 metric tonnes in 2008 (see table below).
Despite the recent boost to output, the Malawi Investment Promotion Agency (MIPA)
reports that the country’s ginning capacity still cannot be met through an exclusive reliance
on domestic cotton sources. The ginning companies in Malawi are all operating under
capacity.9

Cotton Production in Malawi

Year       1998/       1999/      2000/       2001/      2002/       2003/      2004/       2005/       2006/      2007/
           99          00         01          02         03          04         05          06          07         08
Area       53,766      435        48,481      46,773     43,706      63,447     88,535      62,233      60,673     69,826
(Ha)
Yield      51,321      36,527     37,622      39,992     40,446      53,581     50,363      58,569      63,290     76,761
(Mt)
                                                       Source: GoM Ministry of Agriculture and Food Security, 2009

The sole spinner in Malawi, Mapeto (DWSM) Limited is far from operating at full capacity.
At present Mapeto uses at most 5 percent of Malawi’s cotton. It sells on the local market
and exports to Tanzania. The plant has the potential to manufacture across the whole

7
  National Statistics Office of Malawi, “Malawi Trade Statistics Brief 2005,” December 2005.
8
  Fibre to Fashion, “Malawi: Prices Curb Cotton Production,” 7 March 2007.
9
  Inter Press Service, “Trade-Malawi: Clothing and Textiles Become Unstitched,” 2007], (Ginning Companies are. Great
Lakes Cotton Company [2 ginneries];Cargill (Malawi) ltd [2 ginneries];Iponga [2 ginneries]; Malawi Cotton company [I
ginnery] and Nadhi [one ginnery]


                                                          -7 -
production chain, from spinning to weaving to printing and dying. Knitwear Industries,
another manufacturer, produces printed textiles from imported grey cloth.

The Malawi Cotton Company is setting up a new spinning and weaving plant in Balaka
(southern region) under Chinese investors. The output from this plant will be exported
directly to China, the plant will, therefore, contribute little initially to the value chain in
Malawi.


                           Simplified ‘Cotton’ Value-Chain

                                      Malawian Consumers/Businesses
                                      Malawian Consumers/Businesses                         ‘Clothing’
                                                           ‘Clothing’

                                                                         Tailors
                                                                          Tailors           ‘Cloth’

                                                                           ‘Cloth’
                      ‘Clothing’       Garment M’frs                 W’sale/Retail           ‘Cloth’
                                       Garment M’frs                 W’sale/Retail

                                                 ‘Cloth’                    ‘Cloth’

                           ‘Finished Cloth’
                                        Dyeing/Printing/Finishing                                       I
                     E                  Dyeing/Printing/Finishing
                     X     ‘Loom Cloth’     Weavers/Knitters
                                            Weavers/Knitters                               ‘Yarn’       M
                     P                                                                                  P
                     O                                         ‘Yarn’                                   O
                     R               ‘Yarn’                 Spinners
                                                                                                        R
                                                             Spinners
                     T                                                                                  T
                     S                                          ‘Lint’                                  S
                                    ‘Lint’                Ginners
                                                           Ginners                    ‘Cotton’
                                                        ADMARC/GLC
                                                        ADMARC/GLC
                                     Traders/
                                      Traders/
                         ‘Cotton’
                                     NASFAM
                                     NASFAM                    ‘Cotton’


                              Smallholder Cotton
                               Smallholder Cotton                            Estate
                                                                              Estate             ‘Inputs’
                                   Growers
                                    Growers                                 Growers
                                                                            Growers

                                             Private Sector Partnerships for Malawi



In addition to value chain constraints, Malawi’s garments (apparel) and textiles exports are
responsive to trade agreements, such as AGOA, and the international trade climate.




                                                              -8 -
A Key Determinant of Growth: Malawi Performance under AGOA

The main exporters to the American market under AGOA are Giant Clothing Limited, Crown
Fashions Limited and Win Win Garments.

Column 6 of Table 1 shows the share of apparel and textiles exports as a percentage of total
Malawi exports to the U. S. A. over the period 2001 to 2008. The lowest share was 18.1% in
2002 while the highest share was in 2007, at 45.8%. The steep decline in 2008 is due to
increasing competition for the U. S. A. market worldwide, the impact of the global financial
crisis and the deteriorating business enabling environment for the garments and textile
sector. Garments manufacturers in Malawi have witnessed a reduction in orders from the
USA, and quoted prices are unattractive; probably due to competitive pressure from lower
cost producers in the Far East and increasing costs of production in Malawi. Regional
competitors such as Kenya and Zimbabwe are gaining market share, while India benefits
from shorter turnaround times through an integrated cotton-to-clothing chain.

Apparel and Textiles Exports to the USA


       1             2             3                         4             5           6
               Total Malawi Total Malawi               Total Apparel Total Apparel Column 4
              Exports to the    Exports                  & Textiles    & Textiles    as a
               U. S. A (fob)     to the                 Exports (HS   Exports (HS percentage
                             U. S. A. (fob)            Codes 61-63) Codes 61-63) of Column
                                                           to the       to the         2
                                                         USA (fob)     USA (fob)
     Year          MK               US Dollars10            MK         US Dollars    ( %)
     2001     4,496,981,583         62,597,182         1,050,800,711 14,626,959      23.4
     2002     4,652,983,362         60,998,733          844,352.037   11,069,114     18.1
     2003     6,371,112,900         65,708,673         2,355,755,063 24,296,154      36.9
     2004     5,933,507,089         54,737,150         2,684,440,161 24,764,208      45.2
     2005     6,433,072,303         54,563,802         2,211,178,039 18,754,691      34.4
     2006     7,385,293,063         54,568,443         2,366,343,633 17,484,436      32.0
     2007     4,133,045,617         29,667,975         1,893,403,854 13,591,299      45.8
     2008     6,668,472,794         47,693,268         1,553,679,061 11,111,994      23.3


                                                                    National Statistics Office, GoM (Zomba), 2009

Supply constraints, including a lack of modern machinery and trained personnel, are only
part of the difficulties faced by textile producers in Malawi. While the global recession has
also caused downward pressure on demand, equally there is an opportunity to take
advantage of the eventual improvement in economic climate. The mandatory minimum
price instituted for cotton each year by the Government of Malawi limits the purchasing
power of ginners.

10
  Exchange Rates used are end of year buying rates as published in the Reserve Bank of Malawi Financial and Economic
Review, Volume 40 – Number 4, 2008.


                                                        -9 -
The SADC MMTZ/SACU and AGOA agreements provide Malawi preferential market access to
SACU countries and the USA, respectively. The EU EPA agreement under negotiation offers
Malawi similar cumulation opportunities as afforded under the AGOA agreement allowing a
one tariff heading change to meet the new relaxed rules of origin.




                                         -10 -
KEY CONSTRAINTS AND CHALLENGES

General Challenges

Production and competitiveness of the Malawi based apparel manufacturer is adversely
affected by long overland routes to the sea, as well as unreliable energy supply. Significant
investment is required in these sectors in order to improve the situation.


Sector Specific Challenges

The apparel and textiles industry in Malawi has capacity constraints due to sustained
underinvestment, thereby rendering it unable to respond adequately to demand. There is
very little backward integration to the cotton value chain, with spinning being a notable
weak link. The country is consequently a net exporter of cotton lint, while it imports most
of the fabric used for Cut, Make and Trim (CMT) operations. In effect there are three
desperate value chains in the cotton and textiles sectors: (i) Cotton and ginning; (ii) spinning,
weaving and dying; and (iii) CMT.

In the cotton-clothing value chain, the finished apparel segment is capital intensive; and
machinery requires modernization and updating in order to keep up with the production
standards required by the dynamic American and international markets. Access to
affordable financing is therefore a challenge that constrains growth in the sector. In
addition, requisite skills are scarce, especially in production for the export market. In the
short term, the response lies in hiring expatriate manpower. However, Malawi must ensure
that any expatriate input is subject to adequate planning for skills transfer in line with
immigration law: the long term solution to the problem is to develop facilities for generating
such skills within the country. Similarly, there must be heavy investment in spinning thereby
increasing the absorptive capacity of Mapeto DWSM Ltd as well as creating competition in
that market.

The USA Customs Service requires all exporters to comply with procedures and provide
complete production records if they wish to use AGOA. The lack of a USA accredited
certification body increases the cost and degree of difficulty in getting AGOA accreditation.


Key Constraints

   a) Absence of a national strategy and policy guidelines - The Malawi Growth and
      Development Strategy (MGDS) does not outline guidelines for the growth of the
      garments and textiles industry.
   b) Lack of Political will - Insufficient government support for and ownership of textile
      and garments sector as a key development sector. Industry and government are on
      different wavelengths.
   c) Lack of cohesion amongst ministries in dealing with the sector




                                              -11 -
    d) Lack of unity within the industry –Garments and Textile Manufacturers Association is
       weak and under resourced with poor ownership by members and poor capacity to
       lobby government.
    e) Skills shortages - especially in the fields of operations, management and machine
       maintenance, and increased costs as industry is forced to use expatriate manpower.
       Local producers struggle to maintain trained local staff, who are attracted overseas
       by higher salaries. A related complaint from producers is that there is a poor
       attitude to work.
    f) No formal training facilities - most training is in-house.
    g) Insufficient domestic spinning and weaving capacity – significantly increases cost of
       manufacturing and decreases international competitiveness. Absence of a local
       source of fabric means that output from garments manufacturers does not qualify
       for the double stage transformation rule stipulated by some trade agreements (e.g.
       the European Everything But Arms agreement, and the SADC MMTZ/SACU Trade
       Arrangement). This limits the number of markets to which producers can feasibly
       gain access.
    h) Cross-cutting Issues - unreliable supply of electricity and water, the impact of HIV
       and other health issues on the labour force, reliable cost-effective transport and
       transport container availability, distance to ports
    i) Very dependent on third-country inputs - Increases vulnerability, given the needs for
       ‘just-in-time’ deliveries and fast turnarounds to satisfy changing fashion and in-store
       stocking requirements.
    j) Key imports are from Asia - increases cost of production. Far east competitors close
       to textiles manufactures
    k) Poor and high cost of financing – High interest rates, scarcity of foreign exchange and
       high cost of borrowing
.




                                             -12 -
SWOT ANALYSIS

                             SWOT analysis for the Textile sector

Strengths:                                         Weaknesses:

      Cheap labour                                        Lack of unity among industry players
      Preferential trade agreements (with                 Absence of functioning lobbying
       USA, EU and SADC)                                    organization
      Export Processing Zones                             Absence of clear national strategy and
      Established routes to markets in South               policy guidelines
       Africa, USA                                         Shortage of skills
                                                           High turnover of labour / poor attitude
                                                           High transportation costs
                                                           Absence of domestic spinning/weaving
                                                            capacity
                                                           Poor and ineffective GTMA
                                                           Uncertainty on cotton pricing


Opportunities:                                     Threats:

      Access to the USA market through AGOA               Termination of MMTZ/SACU preferential
      Access to South African market through               treatment on 31.12.09
       MMTZ/SACU agreement                                 Malawi does not implement tariff phase
      Access to EU through potential Economic              down under SADC FTA
       Partnership Agreement                               Insufficient government support
      New investment in spinning with full                Inadequate service provision: power and
       government support (including                        water, transport container availability
       incentives)                                         High cost of access to financing
      Unexploited local markets (e.g. school              Scarcity of foreign exchange
       uniforms)                                           Malawi’s stagnation on initialling the EU
                                                            EPA agreement




Based on the strategic outputs of the sector strategy workshop involving the key
stakeholders of the garments and textiles industry, the SWOT analysis and subsequent
research, the following key objectives have been derived.




                                                -13 -
STRATEGIC OBJECTIVES




                                                            a) Develop a clear National
       VISION                                                   Government strategy for the
                                                                sector with strong linkage to
                                                                the MGDS
              To become an efficient, cost                  b) Develop specific action points
              effective, regionally and                         to effectively link the cotton-
              internationally competitive                       to-clothing value chains. The
              textile and garments sector,                      future of the sector depends
                                                                on vertical integration.
              with a fully integrated value                 c) Establish         a      strong,
              chain       from       cotton-to-                 representative GTMA, with
              clothing.                                         basic regulatory powers -
                                                                with adequate resources and
                                                                capacity to manage the
                                                                industry,             promote
        ownership, undertake effective lobbing and ensure commitment.
  d)    Develop a skills academy - Work with TEVETA to meet the real needs of the industry
        by establishing the skills training centre and other institutions and international
        agencies to develop strategic management, marketing and technical skills
  e)    Establish effective and lower cost financing facilities – lobby government to offer
        incentives to improve financing both domestic and foreign
  f)    Ensure industry works with government, through the MGDS on cross cutting issues
        such as electricity water and transport
  g)    To determine export incentives for the industry and sector specific incentives to
        attract investors into spinning and weaving




                                             -14 -
ACTION MATRIX

Matrix of reforms in the Garment and Textile Sector

    Key sector constraints                Strategy                                     Activity                             Resources     Lead Agencies
                                                                                                                             required
     Absence of a national    Develop a clear National            Development of a strategy to effectively link          Study        NWGTP
      Strategy and Policy      Government sector strategy           cotton, textiles and garments in a single value        Consultant   MDPC
      guidelines               linked to the MGDS                   chain                                                  Finance      GTMA
     Lack of political will                                       Ensure strategy is a subset of the MGDS and link                     MIPA/MEPC
     Lack of cohesion                                              to the cross cutting issues in MGDS                                  MIT
      amongst ministries                                           Produce a concept note on export and investment
     Poor utilities                                                incentives for the sector
     Threat of loss of
      MMTZ quotas

     Lack of unity and        Establish a strong,                 Ensure industry’s concerns are raised with             Finance      GTMA
      poor coordination        representative GTMA with             government, statutory organisations, private           Capacity     Exporters
      and communication        regulatory powers given by           sector representative organisations and at              building     MIT
      within the sector.       Government of Malawi                 regional and international trade negotiations.         Staff        MIPA
     Weak and ineffective                                         Establish good practices and policies within the                     NWGTP
      GTMA                                                          industry                                                             MCCI
                                                                   Enlarge membership
                                                                   Promote Public Private Partnership (PPP)

     Poor skills base at      Develop a skills academy for        Development a skills academy/training centre           Consultant   TEVETA
      management,              the garments and textiles           Work with educational institutions and other           Study        GTMA
      technical (machine       industry                             stake holders to develop training in the areas of      Finances     MOEST
      maintenance) and                                              management, marketing and technical skills
      operational level                                             specific to the garments and textiles sector
     No real training
      facilities
     Lack of access to cost   Establish lower cost financing      Review all financial sources available from the        Study        NWGTP




                                                                             -15 -
    Key sector constraints                  Strategy                                 Activity                               Resources         Lead Agencies
                                                                                                                             required
      effective financing      facilities                         commercial market, development institutions,             Consultant       MOF
     Shortage of foreign                                         development partners and NGOs.                                             Development
      exchange                                                   Develop a financing strategy for the sector                                Partners

     Insufficient domestic    Ensure that the enabling          Produce a concept note on export, tax and                Factory shells   MOF
      spinning and weaving     environment for the                investment incentives for the sector                      / textile park   GTMA
      capacity in the sector   development of the sector is      Devise an international marketing strategy to sell        for enabling     MIPA
     Dependent on third       prioritised in the MGDS            Malawi as a destination for cotton, textile and           industry         NWGTP
      country inputs.                                             garments investors                                       Consultant       MIT
     Distance form source                                       Consider integration of yarn processing into skills      Finance          MDPC
      of inputs creates                                           academy facilities to ensure reform of the sector
      higher cost
      production




                                                                           -16 -
he sector
      higher cost
      production




                                                                           -16 -

				
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