In recent years, Africa has emerged as a particularly attractive manufacturing option for U.S. apparel and footwear companies.
By Amber Road
April 03, 2017
In recent years, the apparel and footwear industry has shifted its sourcing away from China to other emerging markets due to increased labor, transportation, tariffs, and other supply chain costs.
This isn’t the first time that manufacturers have diversified their supply chains: “Made in the USA” has already moved to Mexico, Taiwan, Japan, China and now South America. But many apparel and footwear brands in particular have expressed deep interest in exploring the potential and untapped opportunities in Sub-Saharan Africa.
In recent years, Africa has emerged as a particularly attractive manufacturing option for U.S. apparel and footwear companies because of the preferential treatment granted under the Africa Growth and Opportunity Act (AGOA), which provides duty-free access to the U.S. market for eligible countries. In 2015, AGOA was renewed for 10 years – a monumental stroke that will surely allow Africa’s sourcing base to grow.
According to a 2012 report from the American Apparel and Footwear Association (AAFA), roughly half of all its members sourced from Africa at that time. However, Africa is considered uncharted territory for many companies seeking to diversify their supplier base. To realize the cost savings of shifting production to this region, manufacturers will need to clear some significant hurdles.