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Is Sustainability the key to Unlocking Togo’s Textile Industry Potential?

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With Togo moving to position itself as a regional leader in terms of textile production, the country is increasing its focus on sustainability and digitalisation as it seeks to maximise value across the supply chain.

As OBG has recently explored, the global textiles industry is one of the major contributors to climate change: with pre-pandemic annual emissions of 1.2bn tonnes, it is the second-largest industrial polluter, second only to the oil and gas industry.

This situation has led many textile industry players to increase their focus on sustainability and other environmental, social and governance principles.

Opened in June this year, the Plateforme Industrielle d’Adetikopé Textile Park aims to transform the country’s apparel industry value chain, as well as boost exports of cotton textiles and finished garments.

The park’s commitment to sustainability is evident in a range of measures: among others, it will process 100% sustainably sourced cotton, under Cotton Made in Africa standards; use 100% renewable electricity, offsetting 20 tonnes of carbon emissions per day; recycle 90-95% of the water used during processing; and comply with independent international certifications regarding dyeing and finishing fabrics.

Furthermore, the project will also create considerable economic benefits, as it is expected to generate an estimated 20,000 direct and 80,000 indirect jobs, and contribute up to 21% to national GDP.

“Sustainability is at the core of Togo’s development plans, particularly for the textile industry,” Cynthia E. Gnassingbe-Essonam, secretary-general of Togo Invest, told OBG. “If Togo is to compete on a global stage, it must be prudent with the usage of its resources, and ensure that energy sources are reliable and have a good mix of renewables.”

Another public-private partnership that demonstrates Togo’s commitment to sustainability is the 50-MW Mohamed Bin Zayed solar plant in the country’s Centrale Region. Opened on June 24, it is the largest such plant in Western Africa, and will provide electricity to 158,333 households.

The plant was built by Dubai-based AMEA Power, which was drawn to Togo’s “renewable friendly” regulations. The project received $8bn in pre-funding from Togo’s National Development Plan, while 80% of the construction workforce was recruited locally.

A history of textiles production

While these new developments are providing the domestic clothing industry with new impetus, Togo has an established track record as a textiles powerhouse.

In the 1970s the country was considered the centre of commerce in West Africa, with the textiles industry its primary source of revenue.

Female entrepreneurs known as Nana Benz (with “Nana” meaning mother in Togolese, and “Benz” being a reference to their preferred mode of transport) positioned the capital, Lomé, as a regional centre of textile distribution.

By the early 2000s, however, the Nana Benz’s fabrics faced strong competition from the Chinese market, whose textiles sold at one-tenth of the price of those produced in Togo.

This prompted efforts to boost the sector, and between 2011 and 2015 cotton exports more than doubled in volume, from 19m kg to 44m kg. In 2017 Togo’s top import markets for textiles and clothing were China, accounting for almost 50% of the total, followed by Japan (18.9%), Vietnam (4.38%), India (4.04%) and Germany (3.26%).

Such efforts have continued, but the textile industry is still widely seen as having untapped potential, both to consolidate its centrality to Togo’s GDP, and to increase the country’s interconnectivity with regional and global markets.

“The cotton industry already carries its own economic weight but, with more value-added, the industry could become a development axis not only for Togo but for the whole of West Africa,” Gnassingbe-Essonam told OBG.

This is a sentiment shared by Jesse Damsky, the president of Plateforme Industrielle d’Adetikopé. “Despite Togo’s small size, the country offers huge potential for growth and international connections. In addition, the government’s support for building out natural resources and creating value for the industry sector is unwavering,” he told OBG. “Togo already has burgeoning cotton, cacao, phosphates and coffee exports, while the immediate transformation opportunity is in the garment and textile industry.”

Improving logistics, leveraging digitalisation

While there is much optimism surrounding the Togolese textile industry, there are nevertheless various hurdles still to be overcome if the sector is to realise its full potential.

Many of these are related to infrastructure, and in particular to energy supply – a gap which projects such as the Mohamed Bin Zayed solar plant aim to fill.

“The cost of energy is the tipping point for the viability and longevity of a thriving textile industry in Togo,” Damsky told OBG. “Reliable energy is hard to come by in West Africa, and the textiles industry is heavy on both water usage and electricity usage. Balancing these two resources is a key challenge that Togo faces over the next decade.”

Poor-quality roads and a lack of transport infrastructure constitute a further obstacle to trade in the region. However, as OBG has extensively detailed, it is expected that the African Continental Free Trade Area will serve to drive infrastructural improvements, unlocking market potential and creating more integrated supply chains.

Another key issue is related to maximising the potential of the latest technological developments, and in particular those associated with the so-called Fourth Industrial Revolution (4IR).

New digital technologies have already begun to impact Togolese society.

For example, the BBC recently reported that the Togolese Ministry of Posts, Digital Economy and Technological Innovations had worked with a team at the University of California, Berkeley, to produce a “poverty map” of Togo.

This process involved filtering satellite imagery through a computer algorithm in order to establish which were the poorest regions of the country. The map was then used as a basis to distribute emergency cash via mobile phones to those people hardest hit by the Covid-19 pandemic.

Elsewhere, Togolese farmers have begun using drones to spray pesticides on rice crops. A Lomé-based school called e-AgriSky is teaching local farmers how to fly the devices, which in addition to increasing yields and reducing costs, is also much safer than manual crop spraying. By 2025, the school hopes to have trained 8000 certified drone pilots.

Going forwards, digital technologies will likewise be key to boosting value in the Togolese textile industry.

“Working with seed cotton is hard and labour-intensive, especially when compared to other crops in similar areas. Fortunately, there are increasing levels of mechanisation in seed cotton cultivation that are slowly eroding the laborious nature of cotton growing,” Jacky Riviere, country head for agri-business multinational Olam in Chad, told OBG.

But while the industry is poised to embrace 4IR, this will require a sufficiently well-trained workforce.

“Training and digitalisation go hand in hand. Without the necessary people to take new technologies and run with them, few businesses or sectors of the economy will benefit,” Gnassingbe-Essonam told OBG. “Because of this, stakeholders and policymakers in Togo have been proactive in creating centres for study and education.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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COVID-19 Wiped Off $5B Diaspora Remittances, Says FG

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The Federal Government said that the COVID-19 pandemic has wiped off 20 percent of the $25bn annual diaspora remittances to Nigeria.

The government noted that various targeted programmes were being implemented to shore up the deficit.

Disclosing this at a press briefing in Abuja on Thursday to announce the 2021 Diaspora Day celebration scheduled for July 25, the Chairman, Nigerians in Diaspora Commission, Abike Dabiri-Erewa, said the home remittances were over 83 percent of the national budget and 6.1 percent of the Gross Domestic Product.

The World Bank had said remittances by Nigerians in the Diaspora declined by 27.7 percent in 2020. It had also put remittances into the country in 2019 at $21.45bn.

She explained that the remittances serve as economic buffers and safety nets to families for school fees, feeding, hospital bills and many other social support systems.

According to her, 30 percent of the remittances are channeled into investments including real estate, commercial businesses and others.

Responding to a question on the impact of the pandemic on the remittances, Dabiri-Erewa stated, “The COVID-19 pandemic has reduced the annual Diasporan remittances by 20 percent but doesn’t forget that we are also coming up with different programmes.

“Remittances actually go to support families but we are having targeted programmes from the diaspora, particularly housing which would be unveiled that day.”

The NIDCOM chairman stressed that the nation could not afford to ignore about 17 million Nigerians living outside the sovereign boundaries of the nation, sending home remittances of about $25 billion annually.

She noted that the National Diaspora Day 2021 celebration themed: ‘Diaspora integration for national peace and development’, would anchor on peace to accelerate diaspora engagement for national growth and development, adding that no nation succeeded in an atmosphere of insecurity, hatred and divisive tendencies.

Due to the COVID-19 pandemic and its consequences, Dabiri-Erewa explained that the diaspora day 2021 would be celebrated via a webinar and would feature the presentation of the recently approved National Diaspora Policy, nomination for awardees for the proposed National Diaspora Merit Award, presentation from the Diaspora Investment Summit Initiative, among other activities.

The President, Muhammadu Buhari, and other dignitaries, including the Deputy Secretary-General, United Nations, Dr Amina Mohammed; the Director-General, World Trade Organisation, Dr Ngozi Okonjo-Iweala and others will address the participants.

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Nigeria Experience Worst Unemployment In A Decade, As More Youth Seek Migration To Escape Poverty – World Bank

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The World Bank affirmed that Nigeria is currently going through one of its worst unemployment crises in recent times.

“Nigeria is facing one of the most acute jobless crises in recent times. Between 2014 and 2020, Nigeria’s working-age population grew from 102 million to 122 million, growing at an average rate of approximately 3 percent per year, the multilateral lender said in its latest report on Nigeria.

“Similarly, Nigeria’s active labour force population, that is, those willing and able to work among the working-age population, grew from 73 million in 2014 to 90 million in 2018, adding 17.5 million new entrants to Nigeria’s active labour force.

“Since 2018, however, the active labour force population has dramatically decreased to around 70 million—lower than the level in 2014— while the number of Nigerians who are in the working-age population but not active in the labour force has increased from 29 million to 52 million between 2014 and 2020.

“The expanding working-age population combined with scarce domestic employment opportunities is creating high rates of unemployment, particularly for Nigeria’s youth,” the World Bank report noted.

However, between 2010 and 2020, the international financial institution estimated that the unemployment rate rose five-fold, from 6.4 percent in 2010 to 33.3 percent in 2020, with the rates being particularly acute since the 2015/2016 economic recession and further worsened as COVID-19 led to the worst recession in four decades in 2020.

Increasingly, it noted that educated Nigerians were struggling to find employment opportunities in the country while unemployment rates increased substantially for Nigerians across all education levels over the years, becoming progressively challenging for educated Nigerians to find employment opportunities.

“Combined with significant demographic changes and increased aspirations of the youth, Nigeria’s unemployment crisis is creating migratory pressure in the economy.

“Unemployment is considered to be a key driver of migration. Consequently, multiple surveys show that the number of Nigerians, who are looking to migrate internationally is high and increasing,” it pointed out.

In the last few years, the bank stated that the number of persons eager to migrate has increased from 36 percent in 2014, to 52 percent in 2018, noting that the desire to migrate remains higher among unemployed (38 percent), youth (39 percent), secondary education graduates (39 percent), urban residents (41 percent) and post-secondary graduates (45 percent) in Nigeria.

It maintained that since there has not been an expansion of legal migration routes for youth increasingly eager to find opportunities in the overseas labour market, young Nigerians are opting for irregular migration routes to realise their hopes for a better life.

“What is worrying, however, is the increase in the number of forced and irregular migrants from Nigeria, “ it disclosed.

According to a new report by the multilateral lender, the socio-economic challenges facing Nigerians in the last 10 years have led to an astronomical increase in the number of citizens seeking asylum and refugee status in other countries.

The World Bank further estimated that there were 2.1 million Internally Displaced Persons (IDPs) in Nigeria in 2020 alone.

The, however, blamed a combination of rising unemployment, booming demographics, and unfulfilled aspirations as resulting in increasing pressure on young Nigerians to migrate in search of gainful employment overseas.

In addition, the Washington-based institution disclosed that the number of international migrants from Nigeria has increased threefold since 1990, growing from 446,806 in 1990 to 1,438,331 in 2019.

It explained that despite this trend, the share of international migrants as a proportion to Nigeria’s population has remained largely constant, increased slightly from 0.5 percent in 1990 to 0.7 per cent in 2019.

The lender said the recent rise in irregular migration notwithstanding, the share of international migrants in Nigeria’s population was much lower compared to the shares in Sub-Saharan Africa and globally.

The data showed that the number has risen by over 1,380 percent in the years between 2010 and 2019, indicating that in comparison, the number of persons coming into Nigeria from outside has been relatively stagnant in the decade under consideration.

“An important trend that is observed in the data is the rise in the number of refugees and asylum seekers from Nigeria. The share of refugees and asylum seekers from Nigeria has increased drastically in the last decade, growing from 27,557 in 2010 to 408,078 in 2019,” it stated.

It noted that although the country was reaping dividends from the success of its citizens in the diaspora, which was put at five percent of its Gross Domestic Product (GDP) in 2019, when it comes to the discourse on international migration, the narrative has not been palatable.

It stressed that to ensure mutual cooperation, the European Trust Fund for Africa (EUTF), which was established in 2015, with the aim to promote areas of mutual development interest between Europe and Africa, has since provided more than €4 billion in aid to African countries to address various development-related challenges and priorities in Africa.

Since its inception, the EUTF, the bank stated, has provided more than €770 million for migration-related projects in Nigeria, with most of the funds invested in border control measures, awareness campaigns to stop trafficking, and the creation of jobs domestically, including for returned Nigerian migrants.

While predicting that by 2100, Europe’s working age population between the ages of 20 and 64 would decline by 30 percent owing to low birth-rates and increased longevity, it further projected that at same time, the working age-population in Nigeria could increase by 140 percent.

“By expanding legal pathways for migration and implementing supporting measures to reap dividends from current migrants in the diaspora, Nigeria can further benefit from international migration.

“Nigeria’s institutions are well-placed to promote managed migration approaches that help create opportunities for prospective Nigerian job seekers to find employment internationally and can be supported to help design schemes that increase the returns to human capital investments for Nigerian youth,” the report concluded.

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African Development Bank Group and Ethiopia Sign $118 Million Grant Agreement to Support Agro industrial park, Youth Employment

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The African Development Bank Group and the Government of Ethiopia have signed two separate grant agreements for new projects to boost youth employment and electricity trade between Ethiopia and Djibouti.

The grants fall under the Bank Group’s concessional lending window, the African Development Fund, and will go towards the Productivity Enhancement to Support Agro Industrial Parks and Youth Employment Project worth $47 million, and the $71 million Ethiopia-Djibouti Second Power Interconnection Project, which aims to boost electricity trade between Ethiopia and neighbouring Djibouti.

The industrial parks and youth project will see the development of irrigation and water management infrastructure around the Integrated Agro-Industrial Parks, offering opportunities for graduate “agri-preneurs” to establish agro-related, commercially viable businesses. The $102 million venture is being co-financed with the Arab Bank for Economic Development in Africa (BADEA), with a $5.25 million contribution by the Ethiopian government.

Under the scheme, 12,607 ha of irrigated land would be developed and about 3,000 youths will receive both agronomic/agriculture and business development training. Bank financing is expected to cover 4,607 ha and BADEA financing another 8,000 ha.

The irrigation infrastructure will strengthen water users’ associations; protect the water-shed areas around the irrigation schemes; go towards training farmers and youth agri-preneurs on soil and water conservation practices, agricultural production, value addition and marketing; and support established youth SMEs to access credit.

The project will be implemented over a five-year period (2021-2026) under the supervision of the Ministry of Water, Irrigation and Energy and the country’s Irrigation Development Commission.

The Ethiopia-Djibouti Second Power Interconnection Project follows an earlier Bank-financed power interconnection project between the two countries, and builds on its accrued benefits over the last 10 years. It will enable the construction of about 300 km of interconnector lines, 170 km of transmission lines to reinforce the network within Ethiopia, and new construction and expansion of substations in the two countries. In Djibouti, expected benefits include a 65% increase in customer connections and a sharp reduction in the use of thermal generation plants from 100% to around 16%. In Ethiopia, the project would lead to higher incomes from the power trade which over the last 10 years stood at over $275 million in revenue from power exports.

Upon completion, Ethiopia’s revenue from power exports will increase, while at the same time boosting Djibouti’s access to reliable, affordable, and clean electricity and lowering its greenhouse gas emissions.

“By enhancing economic ties through increased cross-border power trade and improved economic competitiveness, the project will contribute towards harnessing regional peace and stability and addressing regional fragility,” said Dr. Abdul Kamara, Deputy Director General, East Africa Regional Development and Business Delivery Office of the African Development Bank.

The Board of Directors of the African Development Bank Group approved funding of both projects on 7 July 2021. The grant agreements were signed on 21 July 2021 by Ethiopian Finance Minister Ahmed Shide, and Kamara.

The African Development Bank is a major player in Ethiopia’s development agenda and currently has operations valued at about $1.76 billion, covering basic services, energy, transport, water supply and sanitation, agriculture, governance, and the private sector.

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