African countries have for decades sought to build a vibrant local fashion industry, to supply local demand and earn foreign exchange from exporting textiles and apparel. However, access to capital has been scarce. Nevertheless, local entrepreneurs continue to weave threads of creativity, culture, and commerce.
Amid this rich fabric, a common thread binds them: the need for funding to fuel their aspirations. Across the continent, innovative initiatives and strategic policies have facilitated access to capital, propelling the local fashion industry towards greater heights and global recognition.
Funding Initiatives Across Africa
South Africa’s Clothing and Textile Competitiveness Programme (CTCP)
Launch Date: 2002
Funding Allocation: Over R5 billion ($268,25m)
The CTCP, launched by the Department of Trade, Industry and Competition, aims to enhance the competitiveness of South Africa’s clothing and textile industry. Through grants and incentives, the programme supports local manufacturers, designers, and retailers in upgrading machinery, improving skills, and expanding market access.
By investing over R5 billion since its inception in 2002, the CTCP has played a pivotal role in revitalising the sector and promoting job creation.
Similarly, South Africa’s strategic plan for the clothing, textile, footwear, and leather (CTFL) industry has achieved remarkable success, creating over 20,000 jobs since its inception five years ago, according to Minister of Trade, Industry, and Competition, Ebrahim Patel.
Notably, major retailers have significantly increased their sourcing from local manufacturers, with a 51% rise in the number of clothing items purchased locally, totalling 371 million units more than the baseline. Minister Patel shared this encouraging update at a meeting in Cape Town with key stakeholders, including retail executives, manufacturers, labour union representatives, and government officials.
“Over this period, we’ve been able to take an industry which had been decimated by imports and low investment and stabilise it through the collaboration and partnership which the master plan has provided. These efforts have built a platform which has led, in just a short time, to increased local procurement; increased manufacturing employment; and better administration of imports at the country’s ports of entry,” Patel was quoted as saying by the state-controlled news agency.
South Africa’s $3.8 billion export in this sector in 2023 puts it ahead of Ethiopia’s $2.5 billion and these are the top three African countries in clothing, textiles, footwear and apparel exports. Kenya comes third with $1.5 billion, buoyed by its resolute participation in the United States of America’s African Growth and Opportunity Act (AGOA), designed to ease access to the U.S. market.
Ethiopia’s Leather Industry Development Institute (LIDI)
Launch Date: 2010
Funding Allocation: $200m
LIDI, established in 2010, focuses on fostering the growth and competitiveness of Ethiopia’s leather and footwear sector. With a dedicated fund of USD 200 million, the institute provides financial assistance, technical support, and training programs to local entrepreneurs. By facilitating access to funding for equipment, infrastructure, and market development, LIDI empowers artisans and SMEs to harness the full potential of Ethiopia’s abundant leather resources.
In 2021, an approximate value of $28.6 million of raw hides and leather was exported from Ethiopia. This represented a strong decrease in value in comparison to 2018 when over 50 million U.S. dollars of the products were exported.
Ghana’s National Board for Small-Scale Industries (NBSSI)
Launch Date: 1985
Funding Allocation: GHC 10 million ( $7.20m) (Presidential Business Support Programme)
NBSSI, established in 1985, serves as the primary agency for promoting and supporting SME development in Ghana. Through flagship programmes like the Presidential Business Support Programme, NBSSI provides financial assistance, training, and advisory services to entrepreneurs in various sectors, including fashion and textiles. With an allocation of GHC 10 million for the
Presidential Business Support Programme, NBSSI enables local fashion businesses to access funding for capacity building, technology acquisition, and market expansion.
Ghana’s once-thriving garment and textile industry had suffered a devastating decline due to the influx of affordable Asian imports and the constraints of international development agreements. A similar situation in Nigeria.
Nevertheless, the 2020s have ushered in a remarkable resurgence for Ghanaian clothing manufacturers, driven by innovative marketing strategies, effective social media utilisation, and a talented pool of local designers.
These creatives are now producing high-end fashion that exudes distinction and excellence, signalling a promising revival for the industry.
Kenya’s Export Processing Zones Authority (EPZA)
Launch Date: 1990
Funding Allocation: KSh 1.5 billion (11.45m)
EPZA, established in 1990, aims to promote Kenya’s exports and attract foreign investment through the development of export processing zones (EPZs).
With an annual budget of KSh 1.5 billion, EPZA provides financial incentives, infrastructure support, and facilitation services to businesses operating within EPZs, including those in the fashion and apparel sector. By offering competitive tax breaks, duty-free imports, and streamlined regulatory processes, EPZA fosters a conducive environment for local entrepreneurs to thrive and compete in the global market.
Kenya is also a beneficiary of the AGOA, which was signed into law on May 18, 2000. This act allows sub-Saharan exporters of apparel to the U.S. market duty-free access, which is a great leverage over non-eligible members such as Asian countries.
Nigeria’s Bank of Industry (BOI) Fashion Fund
Launch Date: 2011
Funding Allocation: N10 billion
BOI’s Fashion Fund, established in 2011, is dedicated to providing financial support to entrepreneurs in Nigeria’s fashion industry.
With an initial allocation of N10 billion, the fund offers concessionary loans, grants, and capacity-building programs to designers, manufacturers, and retailers. By addressing key challenges such as access to finance, infrastructure, and market linkages, BOI’s Fashion Fund catalyzes the growth and sustainability of local fashion businesses, driving economic development and job creation across the country.
Furthermore, the BOI Fashion and Beauty product is a special fund to cater for the needs of businesses operating in the fashion and beauty industry. It is expected to address gaps in access to credit facilities in this sector.
Eligibility Criteria
All businesses must be registered with at least one relevant trade association. The Cooperative (Cluster) must have registered for at least two (2) years before the loan application
Lessons for Nigeria
There are a number of lessons for Nigeria, springing from these initiatives across Africa.
Holistic Support Ecosystem: Nigeria can learn from countries like South Africa and Ghana by establishing comprehensive support ecosystems that combine financial assistance with capacity building and market access initiatives. This integrated approach enhances the resilience and competitiveness of local fashion businesses.
Public-Private Partnerships: Collaborative efforts between government agencies, financial institutions, and industry stakeholders are essential for promoting sustainable growth in the fashion sector. Nigeria can foster strategic partnerships to leverage resources and expertise in supporting entrepreneurs across the value chain.
Innovative Financing Models: Exploring innovative financing models such as venture capital, impact investing, and crowdfunding can broaden the funding landscape for Nigerian fashion entrepreneurs. By diversifying sources of capital, Nigeria can stimulate entrepreneurship and innovation in the industry.
Policy Reform and Advocacy: Nigeria should prioritise policy reforms that create an enabling environment for fashion entrepreneurship, including streamlined regulations, tax incentives, and intellectual property protection. Additionally, advocacy efforts can raise awareness about the importance of the fashion industry and garner support from policymakers and investors.
Capacity Building and Mentorship: Investing in capacity-building programmes and mentorship initiatives is crucial for nurturing talent and fostering entrepreneurship in Nigeria’s fashion ecosystem.
Stephen Ikechukwu Onyekwelu
“In the practical use of our intellect, forgetting is as important as remembering.” William James
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