Clothing Manufacturers To Be Hit Hard By Weak Rand

Something I didn’t get to mention in last night’s interview in response to Coenraad Bezuidenhout’s claim that a rand/dollar exchange rate of around 9/9.50 has been deemed beneficial by manufacturers to the industry, is what manufactures exactly are we talking about?

Cape Chamber of Commerce director Viola Manuel said on Friday in response to the weakening rand that: 

“In the Western Cape, the clothing industry will have to pay more for imported textiles, and as 80 percent of the fabric used by local manufacturers is imported, the industry could be hurt,”


“On top of that, there is a 22 percent duty on imported fabrics. This adds up to the threat to jobs.”

In other words, this group of manufacturers are about to be hit hard by the weakening rand, not benefit from it as the Manufacturing Circle claims they will. Furthermore, the import duties on imported fabrics have probably been set up to protect local fabric manufacturers, but that will also harm local clothing manufacturers, not help them.

Asking for a weak rand can and will only redistribute profits and losses in a very uneven and unfair way across the economy, and will tend to over time hollow out the manufacturing sector, not boost it.