Global blow: Cheap im­ports bat­ter African busi­nesses

The Washington Times Weekly - - World - By Ge­off Hill

JO­HAN­NES­BURG—The­p­oorin rural Africa have for years cooked their meals of stew and corn­meal por­ridge over open wood fires in three­legged cast-iron pots that are made in South Africa and sell for about $55.

Re­cently, how­ever, a foundry in Shang­hai has be­gun ship­ping its ver­sion of the pots to Africa, where even af­ter ship­ping and im­port du­ties, they can be pur­chased for as lit­tle as $15.

The trend — re­peated on prod­uct af­ter prod­uct and in coun­try af­ter coun­try across Africa — has been a huge boon for the con­ti­nent’s poor, many of whom are now able to af­ford con­sumer prod­ucts that pre­vi­ously were be­yond their reach.

But it has de­liv­ered a body blow to an al­ready weak man­u­fac­tur­ing sec- tor, elim­i­nat­ing jobs and forc­ing com­pa­nies like one Jo­han­nes­burg cook­ing-pot maker to con­sider mak­ing its prod­ucts abroad.

South Africa alone has lost 70,000 jobs in the ap­parel sec­tor over the past four years be­cause of im­ports from low-cost Asian pro­duc­ers, said Rudi Dicks, co-co­or­di­na­tor of the Congress of South African Trade Unions.

“Thou­sands of jobs have also been shed” in South Africa’s elec­tron­ics sec­tor be­cause of the cheap im­ports, Mr. Dicks told The Wash­ing­ton Times dur­ing a re­cent visit to Geneva.

South African gov­ern­ment fig­ures show China has eclipsed the United States to be­come the na­tion’s sec­ond­largest source of im­ports, and could take top place from Ger­many as early as next year.

The De­part­ment of Trade and In- dus­try in Pre­to­ria, South Africa, says im­ports from China al­most tripled from $2.4 bil­lion in 2003 to $6.7 bil­lion last year. Gar­ment sales in­creased by 81 per­cent last year alone, ac­cord­ing to es­ti­mates by the World Trade Or­ga­ni­za­tion.

Ebrahim Pa­tel, gen­eral-sec­re­tary of the South­ern African Cloth­ing and Tex­tile Work­ers Union (SACTWU), cal­cu­lates that ev­ery African bread­win­ner sup­ports an av­er­age of six per­sons.

That means the 70,000 tex­tile jobs lost in South Africa are af­fect­ing al­most half a mil­lion peo­ple in a coun­try al­ready suf­fer­ing from high un­em­ploy­ment, he said.

His re­marks re­flect a grow­ing con­cern across Africa, from Kenya to Nige­ria, Le­sotho, Namibia, Mada­gas­car and even Mau­ri­tius, which is a ma­jor ex­porter in its own right.

A re­cent U.N. re­port found that Chi­nese com­pa­nies are present in 48 African coun­tries and that an­nual trade with Africa, now $56 bil­lion, has grown five­fold since 2000.

In South Africa, the gov­ern­ment has im­posed quo­tas on tex­tile im­ports and passed new leg­is­la­tion re­quir­ing all re­tail­ers to mark prod­ucts with the coun­try of ori­gin.

But sev­eral con­sign­ments of goods have been seized at the coastal city of Dur­ban, where Chi­nese prod­ucts have ar­rived with la­bels declar­ing them as made in South Africa.

Daniel Tor­res, an in­dus­try con­sul­tant, said the prob­lem is ex­ac­er­bated in coun­tries such as Kenya by “dump­ing,” a process in which com­pa­nies sell goods at less than the cost of mak­ing them in or­der to build mar­ket share.

John Zarocostas in Geneva and Car­men Gen­tile in Port Harcourt, Nige­ria, con­trib­uted to this ar­ti­cle.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.