Zimbabwe textile manufacturers are facing a liquidity crisis. They have appealed for the disbursal of foreign currency to ensure members meet their obligations and remain in business. People have resorted to buying foreign currency in the black market at exorbitant rates, thereby distorting prices on the market. Others are hoarding cash for speculative purposes.
The textile industry needs urgent intervention to avert a total collapse. The industry includes blanket and linen manufacturers and hosiery manufacturers. Manufacturers say once there is easy access to forex, the industry can start exporting and earn the much-needed foreign currency. They also want the export incentive to be raised from five per cent to 25 per cent.
The value of Zimbabwe’s clothing and textile exports has grown 165 per cent from 2012 to 2016. However, the apparel sector in Zimbabwe currently operates at less than 30 per cent of its capacity. The industry that once used to employ over 40,000 people now employs only 8000 workers.
Zimbabwe’s textile and clothing sub-sector consists of three components: production and ginning of cotton, transformation of lint into yarn and fabric, and the conversion of fabric and yarn into garments. There are also those companies that are in protective clothing that have been doing well because of the mines that are opening up.