Tuesday, 30 December 2014

International Business: African Economies and Fashion

The overall African economy has been growing at an average rate of 5% a year for the past 10 years. That does not mean, however, that all economies are created equal. Guinea, for example, is regarded as the worst country for business in the world due to its political corruption, ebola outbreak, and trade deficit. On the other hand, Botswana is considered the best country for a good return on investment when risk factors are considered. Many countries in Africa including Tanzania, Rwanda, Democratic Republic of Congo, Ghana, Ethopia, and Nigeria are considered by the IMF to be some of the world's fastest growing economies. Currently, Algeria is trying to improve relations with the United Kingdom and other European countries to increase its international business and improve international relations. As part of a concerted effort in Africa to improve telecommunications, there are plans to continue building underwater and terrestrial fiber-optic cables along the coast of Africa, thus making international business communications easier.

When it comes to the textile and apparel industries, noteworthy countries include Kenya, Ethiopa, and Tanzania. Kenya is known for having relatively inexpensive labor while still having a quality product while Ethiopa is somewhat cheaper due to cheaper electric costs but does not have the same quality or consistency that Kenya offers. Tanzania is just beginning to gain a foothold in the African textile and apparel sectors, but has the backing of the government to continue improvements in the industry. South Africa's textile and apparel market is somewhat more established than other countries, but that is to be expected due to its stronger economy and economic development. Part of the interest in the African textile and apparel market is due to rising labor prices in countries such as China and India as well as health concerns and workers' rights issues in countries such as Bangladesh.One looming concern as to the future of textile and apparel markets in Africa is the renewal of AGOA (African Growth and Opportunity Act) with the U.S. Unless renewed, it will expire in September 2015. AGOA has allowed for duty-free trade in African countries with fair trade, workers' rights, and honest business practices. Each country is reviewed on its own to determine whether or not it meets U.S. standards.

For those interested in textile and apparel business relations in Africa, it may be wise to attend one of Africa's largest industry trade shows: Source Africa 2015. Source Africa will be held in Cape Town, South Africa.

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