Egypt’s exports of readymade clothes increased 16 percent in the first quarter (Q1) of 2018, recording $382 million (LE 6.75 billion), compared to $330 million during the same period of 2017, according to Sherin Hosny, executive director of the Ready Made Garments Export Council.
Exports to African Countries
Hosny added that the sector’s exports to African countries do not exceed 2 percent, but activating trade agreements, especially the African Continental Free Trade Area, will increase the export of Egyptian products to specific markets such as South Africa, stating that South Africa’s demands for readymade clothes are increasing.
She clarified that not having a specific trade agreement with South Africa, in addition to the high tariffs, are considered to be obstacles in the way of exporting to South Africa, hoping that these obstacles are solved by the African Continental Free Trade Area agreement.
Through this agreement, Egypt can import accessories used in manufacturing ready-made garments from African countries, and African countries can rely on Egypt’s textile sector, Hosny said. She added that such an agreement creates opportunities for cooperation between Egypt and African countries in the field.
The export council aims at increasing readymade clothes’ exports 20 percent by the end of 2018 to record $1.8 billion, according to Hosny. She anticipated that the sector’s exports will exceed $1.8 billion in case the rate of exports continues on the same trajectory as the first quarter of the current year
Hosny said that the export support fund worked on overcoming the burdens of exporters in light of high shipping costs, adding that the fund is also targeting to have Egyptian products that can compete globally and to provide foreign currencies to the Egyptian treasury. Generally, Egypt has an export support fund that helps companies introduce Egyptian products to international markets. Hosny said that the exporters of ready-made garments have arrears to the fund reaching 18 months.
Hosny said that the QIZ agreement has had a significant role in the rise of Egypt’s exports of readymade clothes since the fourth quarter of 2018. Egypt signed the Qualified Industrial Zone (QIZ) agreement with Israel and the United States in December 2004, allowing Egyptian products to enter American markets with no tariffs, provided that Israeli components represent 11.7 percent of these products.
In October 2017, Egypt signed a new agreement with Israel, including a modification of the QIZ deal, reducing the percentage of Israeli components in Egyptian products to 10.5 percent.
Destination Africa Exhibition
Regarding the third edition of the “Destination Africa” exhibition, Hosny said that the exhibition targets more Egyptian exhibitors for the ready-made garments sector and brings 400 foreign buyers – 200 buyers of ready-made garments and 200 buyers of furniture and textiles. The exhibition spans an area of more than 3,000 square meters.
Hosny said that the export council contacted all the embassies and commercial offices in Egypt to participate in the exhibition, seeking to achieve the exhibition’s goal of integrating the garment baskets in Africa, with Egypt turning into the main center for garment production on the continent.
She clarified that Destination Africa doesn’t target increasing exports to Africa, but creating integration between garment and furniture manufacturers in Africa to export to the rest of the world. Destination Africa is an international, specialized, pan-African B2B sourcing event for the readymade garment, textiles and home textiles industries in Africa. The exhibition aims to have Africa as the sourcing destination in these industries. It is organized by the Egyptian Exporters Association (ExpoLink), the Readymade Garments Export Council, the Textile Export Council and the Home Textiles Export Council.