Cotonou cottons on to global clothing market

In the vast factory, the whizzing and whirring of sewing machines drowns out the sound of voices. More than 150 people, sitting at row after row of large production tables, are cutting and stitching together coloured sheets of cloth to make T-shirts and other garments. But this is not Bangladesh or China – we are in Benin, one of Africa’s smallest nations.

Despite its size, the West African country is a leading producer of cotton on the continent, exporting over 700,000 tonnes each year. Its government has recently embarked on a mission to capture more of the cotton’s value by processing the raw material in Benin rather than exporting it elsewhere.

Central to these plans is the Glo-Djigbé Industrial Zone (GDIZ), a vast industrial park around 40km north of the capital city of Cotonou, which is expected to become home to 32 integrated textile factories by 2030. The plan is to transform locally-grown cotton into world-class clothing that can be exported to Europe and North America.

 “What is happening here is transformation,” says Létondji Beheton, CEO of the Société d’Investissement et de Promotion de l’Industrie (SIPI-Bénin), which runs the GDIZ. “This is completely different from anything else that you have seen anywhere else in the world. Even Chinese development did not happen in this way. We are very clearly trying to improve the lives of our people while we add value to the cotton industry.”

The CEO is referring to the way in which some Asian countries developed rapidly on the back of sweatshop factories where staff work long hours in terrible conditions to produce cheap consumer goods for the West. He argues that the African equivalent of the light-manufacturing development model sets itself apart by ensuring that factory workers are paid and treated well.

Workers at the factory get paid CFA60,000– around $100 a month. This compares with a minimum wage for entry-level garment industry workers in Bangladesh of around $75 a month – although the latter have been pressing for a raise to $215.  It remains to be seen whether Benin’s wage level will prove competitive – and whether worker-friendly conditions can be upheld – in a global garment market defined by fierce price competition.

Export focus

The T-shirts currently being manufactured are destined for the US in a boost for a sub-Saharan African industry that has historically struggled to compete with South and Southeast Asia. SIPI-Bénin is a joint venture between the government of Benin and Arise Industrial Integrated Platforms, which also operates other special economic zones (SEZs) in Gabon and Togo. It has signed a contract with US clothing manufacturer TCP Apparel to export 50,000 T-shirts to America.

Benin is among 35 African countries currently eligible to import goods into the US under its African Growth and Opportunity Act (AGOA), which provides tariff-free access for garments and certain other goods. According to the Office of the United States Trade Representative, Benin exported just $92,000 worth of woven apparel to the US in 2019, the last year for which data was made available. This was far behind categories such as edible fruit & nuts  ($8m), preserved food ($197,000), and furniture and bedding ($174,000). 

Beheton says that the GDIZ is also targeting contracts with European-based global clothing retailers such as M&S, H&M and Zara.

Improving the supply chain

The creation of the GDIZ is set to have a knock-on effect across Benin’s cotton supply chain. Patrice Donondu, manager of a cotton-cleaning factory in Bohicon, says that the industrial zone should eventually receive around 13% of Benin’s cotton production – nearly all of which is currently exported.

“Processing the cotton here in Benin will benefit everyone,” he tells African Business. “It will increase the demand and boost business across all areas of the supply chain”.

Donondu presides over one of 20 factories in the francophone country managed by the Société pour le Développement du Coton (Sodeco). The factories clean cotton procured from smallholders in a process known as “ginning” – removing the seeds, dust or any other foreign particles.

Outside the huge plant in Bohicon, 12 trucks packed full with about 30 tonnes of cotton wait to unload the precious commodity. The factory processes around 300 tonnes of cotton a day, with much of it destined for export as huge bales wrapped in green plastic.

At a farm around 12 miles outside Bohicon, a village called Houegnonkpa has been home to cotton farmers for several decades. The chief of the village, Raphael Dovonon, says that he hopes to sell some of his cotton to the GDIZ and is excited about the prospect of a large buyer in Benin.

Macroeconomic effect

Cotton currently contributes around 40% to Benin’s GDP and up to 80% of exports. Beheton says that the GDIZ has hugely ambitious targets for boosting garment exporters to raise value in the cotton trade. 

“Benin currently exports cotton worth around $500-600m every year,” he says. “With this transformation happening in the zone, from fibre to fabrics, we are going to generate approximately $11.6bn in terms of value each year.”

The first phase of the GDIZ, located on 400 hectares of land, expects to welcome 36 different companies, with a total investment of over €550m ($603m) by the end of this year. Along with cotton, other manufacturing companies that process commodities such as cashew nut, pineapple, shea nuts and soya will build factories in the GDIZ.

The zone is also opening its doors to non-agricultural players such as Mauto, an e-mobility startup that is building an electric motorbike assembly plant in the GDIZ. Since May 2022 it has deployed over 4,500 electric motorcycles in Benin, Togo and Rwanda.

Beheton adds that in the next three years the GDIZ will have a 300 MW solar power plant, providing cheap electricity to the companies that set up shop in the industrial zone.

“Then on the rooftops of all the warehouses we will install solar panels which will generate 100 MW of electricity,” he says. “In addition to that we will build a gas power plant here which will provide 142 MW. We will be able to provide very cheap electricity”.

The CEO of the joint venture says that a key attraction for foreign investors is reduced taxes for a set amount of time and waived export fees. The GDIZ in Benin follows a similar model to Arise IIP’s Nkok SEZ in Gabon, which processes timber.

In 2010 the Gabonese government implemented a total ban on the export of raw timber, ensuring that value is added to the natural resource before it is exported. Beheton says that there are “discussions underway” for a similar policy in Benin with regard to cotton, but nothing is confirmed yet.