Africa: the ever-lasting promise, still a wasteland for sourcing

Nigeria, Angola, Ethiopia, Kenya. The increase of production costs in the Asiatic South-East and the need to approach production to Europe due to fashion’s new rates have turned black Africa into the ever-lasting promise of fashion sourcing. But these sub-Saharan poles are still far from becoming the new Morocco or Bangladesh. During the last ten years, European fashion purchases in Africa (except in the North) have collapsed a 30%, Botswana being the main supplier of the region.

Whereas in the northern countries of Africa like Morocco, Tunisia or Egypt, they maintain a more relevant role as European fashion’s sourcing spots, counting with a settled industry and an appealing closeness to the continent, purchases in the Sub-Saharan Africa have descended during the last decade.

In fact, since 2007 the European fashion imports directed towards this group of countries has reduced a 32%, reaching barely 4.53 billion euros, which is just the double as other key individual markets for the sector like Italy, Portugal or Germany.

During the last decade, African purchases in the sector have registered an unequal evolution. Whereas Morocco gained importance, imports to countries from Sub-Saharan Africa unleashed four consecutive years of drops, between 2011 and 2015, to then bounce back an 18.7% during 2016 and the decrease a 16.7% again in 2017.

Low production costs have not managed to compensate, at least for now, other deficiencies like energetic problems, poor infrastructures and the little qualification of the workforce.

However, many players, both industrial as distribution ones, have been taking positions in markets like Ethiopia for years, a recurrent leader in the sector’s foreign investment. Groups like H&M, Primark or PVH are deriving part of their production to the African country, whereas Zara, Levi’s or Under Armour are doing so through their supplier in Dubai, and Giorgio Armani and Hugo Boss, in collaboration with their Chinese partner. The Industrials in the Asiatic giant are, in fact, the ones leading investment in the country.

Nevertheless, Ethiopia is note even among the top sourcing countries of European fashion in the continent. At the top are, and with a great distance, Botswana and South Africa, with imports valued in more than one billion euros last year.

They are followed, but below the 400 million, by Madagascar, Mauricio, Lesotho, Angola and Congo. Nigeria stands in the eight position, with barely 152 million euros in imports in 2017, and Namibia, with 140 million. Ethiopia is the number thirteen of the list, with fashion sales to Europe valued only in 50 million euros.

During the last ten years, Lesotho, Tanzania and Zimbabwe have been the countries that have increased the most their fashion sales to Europe, obtaining more than the double, although it has to be taken into consideration that they did start from quite a negligible base. However, purchases in the most developed country in the continent which is South Africa, as well as Namibia and Mauricio, have recued to a double-digit.