Solving unemployment through textile, apparel industry: The case of DTRT
The Country’s unemployment situation reached an all-time high after increased population and low economic output pushed the rate into double digits at the last count.
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The 2021 Housing and Population Census report by the Ghana Statistical Service (GSS) indicated that the rate of people who are available for work but unable to find jobs had more than doubled from 5.3 per cent in 2010 to 13.4 per cent, which was the highest since 1984 when the country’s unemployment data was first reported.
Out of the economically active population of 11.54 million, the report showed that 1.55 million were unemployed. Females and youth between the ages of 15 years and 24 years were the worse hit.
To many, the report of the GSS was a clear reflection of the joblessness situation in the country, with university and tertiary graduates using an average of five years before they could land themselves a job.
This high rate of unemployment among young people and university graduates is the country’s most urgent social, security and political problem.
Textile and apparel industry
As the search for jobs intensifies in the country, one area that has been identified as a huge source of jobs for the teeming unemployed youth of the country is the textile and apparel industry, which employs millions of people across the world.
Countries like India, China, Bangladesh and Vietnam among others, have capitalised on this sector to create employment and grow their economies.
The World Bank has always maintained that this industry has the potential to create better jobs and lift a lot of people out of poverty. In India, the industry has created over 45 million jobs, making it the second highest employer; and contributes over 13 per cent of export earnings.
In Ghana, although the government identified the sector as one of its anchor industries, very little has been done to unlock its full potential.
Also although the African Growth and Opportunity Act (AGOA) gives free market access to apparel manufacturers in Ghana to export their products to the USA, only a few companies have been able to take advantage of this opportunity due to the lack of support.
The case of DTRT
Local apparel manufacturer, Do The Right Thing (DTRT), is a good case of what the textile and apparel industry can do for a country in terms of job creation and economic growth.
The company, which started in 2014 with a staff size of 25 people, now employs over 5,000 people, making it one of the country’s largest private sector employers that rakes in over US$40 million in export revenue annually.
DTRT, which is one of the few companies which have taken full advantage of the US market under the AGOA initiative, now has two factories in the country, with plans to expand further into other West African Countries.
Speaking in an interview with the Graphic Business, Co-Founder of DTRT, Marc Hansult, said the country could take full advantage of the US$2 trillion apparel market with the right mindset.
He said taking advantage of the industry would, however, require huge investments, stating that DTRT had, over the years, invested over US$50 million into its operations.
“There are lots of opportunities, not just for Ghana but for the West African region.
The apparel industry is projected to be a US$2 trillion industry by 2025 and traditionally, most manufacturing is happening in China, Vietnam, Bangladesh and some countries in South Asia but there are so many production volumes that are looking for new homes right now and this creates tremendous opportunities for West Africa.
“To maximise that opportunity, we need the right strategy, policy framework and investments. If it is done right, we are talking about an opportunity to create jobs and increase exports,” he pointed out.
He noted that if the country could even take just two per cent of the global market share, over 100,000 jobs could be created.
Investments in equipment and training
Mr Hansult noted that the success of the industry would very much depend on investments in training and equipment, stating that a significant part of DTRT’s US$50 million investment had gone into equipment, which needs to be continuously upgraded, and the training of people.
“When we started, there was very limited experience here in the industry but we have trained over 10,000 people since 2014 and that is a big cost to the company,” he stated.
He said the company had plans to make further investments, which include the building of a new factory that would allow it to train and hire about 6,000 people more.
“So we are creating 6,000 new jobs through that investment. We are also planning to expand radically and start producing some of the raw materials for our production,” he stated.
IFC’s support
Backing Ghana’s ambition to become a regional textile and apparel manufacturing hub, the private sector arm of the World Bank, the International Finance Corporation, last year, partnered with DTRT to support the expansion of the company’s garment production capacity and create thousands of jobs.
Under the partnership, IFC will lend DTRT up to US$8 million, including US$4 million from IFC’s account and US$4 million from IFC in its capacity as the implementing entity of the International Development Association’s Private Sector Window.
Speaking in an interview with the Graphic Business, IFC’s Senior Country Manager for Ghana, Kyle Kelhofer, said having West Africa’s largest apparel manufacturer in Ghana presents a huge opportunity for the country to attract a lot more global apparel manufacturers.
He said Ghana’s good infrastructure, which includes a world-class seaport, reliable power, a trained workforce and a stable political environment, puts it in a position to become a global apparel hub.
Sharing his experience of living in both Vietnam and Bangladesh, he said he was a witness to how the industry had created millions of jobs and lifted people out of poverty.
“I was in Bangladesh and Vietnam and I asked myself: “Why can’t we do this in Ghana?” Because this is what we need to create nice and safe jobs here.
“In Bangladesh, the industry has created 30 million jobs for a country of 106 million people, and because of this industry, which is like 95 per cent of the export in Bangladesh, the average income there is now higher than that of India,” he stated.
He said the IFC was, therefore, committed to helping the industry grow and attract a lot more global brands.