Benin is 1st African Country to Host WTO’s World Cotton Day

Each year, the 7th of October marks the World Cotton Day. In 2024, Benin became the first African country to host the WTO event. Stakeholders involved in the cotton Global Value Chain (#GVC) attended the event centered around the theme: “Cotton for Good.”

Cotton is central to the economy of many West and Central African countries. The region accounts for half of Africa’s total cotton output and 4% of global production. The West and Central Africa region is the 3rd largest of cotton behind USA and Brazil.

Currently, large cotton producers such as USA, Brazil and China are providing subsidies to their cotton growers. On the other hand, the Cotton4+ countries comprising of Benin, Burkina Faso, Chad and Mali do not have the financial means to match the level of financial support of aforementioned producers.

The cotton subsidies are distorting the market and the issue has been raised at the World Trade Organization since at least 2003. Unfortunately, the negotiations have not made much progress in spite of the ‘relentless efforts’ of the WTO to level the playing field.

The cotton business exceeds USD 23 billion in 2022 and subsidies add up to USD 8 billion. The African market for cotton is worth USD 12 billion. The #AfCFTA is expected to give a boost to the cotton trade.

“I hope this World Cotton Day serves as a platform to coordinate our efforts to improve the conditions for cotton farmers and supports transformation of the sector, focusing on sustainable development and maximizing gains in growth, jobs and opportunities.”

WTO DG Ngozi Konjo-Iweala
6th World Cotton Day Conference in Cotonou, Benin
6th World Cotton Day Conference in Cotonou, Benin

With that in mind, it might be wiser to take an alternative pathway by promoting local value addition (#LVA). Africa produces one of the best cotton in the world. Due to its climate, Africa can output cotton all-year round.

Historically, it might be worth recalling some of the steps taken. Following the slow pace of WTO discussions, ECOWAS has adopted is Cotton Agenda on 22 December 2023. The objective then was to achieve at least 25% of local beneficiation by 2010.

In 2003, ECOWAS produced about 400,000 tonnes of cotton and this figure exceed 1,000,000 tonnes by 2010. At that point, a study showed that less than 3% of the cotton was transformed locally.

In the light of the findings, ECOWAS has updated the Cotton Agenda by placing the bar higher at 25% LVA by 2020. Then, another evaluation took place in 2020 and showed that the situation had hardly improved.

In February 2024, the WTO has launched the Cotton Partnership initiative to support Africa unlock its potential in the cotton-apparel ecosystem. The initiative seeks to promote Public-Private Partnerships (#PPP) to climb up the value chain and work towards sustainable textile.

Garment Factory in Glo-Djibb Industrial Zon (GDIZ) in Benin
Garment Factory in Glo-Djibb Industrial Zon (GDIZ) in Benin

Strategic efforts in that direction are taking place in the region. Benin has set up the Glo-Djigbe Industrial Zone (GDIZ) and Senegal has set up the Diamniadio #SEZ to promote local transformation of cotton. Similar initiatives are happening in Burkina Faso, Mali ,Cote d’Ivoire and Togo. The latest update is to achieve at least 10% LVA by 2030.

The studies have highlighted that one of the major hurdles is the availability of affordable and reliable electricity. The machines in cotton mills require quite a lot of energy to run.

According to a study by WTO, Africa will need a minimum of USD 12 billion over the coming decade in order to achieve full vertical integration from cotton growing to garment manufacturing. Therefore, more efforts are needed to attract #FDI to bolster the #electrification and #industrialization.

Another area for improvement is the way African cotton is graded and marketed. So far, the cotton is evaluated manually and visually via only two dimensions, namely fiber length and grade. In that regard, it might be worth recalling that the West Africa cotton is of medium length. The USA and Egypt produces cotton with long fibers and this high-end of the market only represents of the global market.

ECOWAS has proposed upgrading the evaluation to be more comprehensive and scientific using the latest technologies and instruments. Thus, in line with the recommendations of the International Cotton Advisory Committee (ICAC), the cotton is to be evaluated based not only of its fiber length but also on its fineness, maturity, uniformity, reflectance, color, and strength, to name a few parameters.

A more up-to-date and comprehensive will allow African cotton to fetch a fairer price on the international marketplace. However, lobbies and cartels among certain grower, intermediaries and millers have put a break on these proposed improvements.

Therefore, African states must have the vision and solidarity to move up the cotton GVC. The governments must display the political will to push forward the LVA agenda by promoting vertical integration from cotton to clothing and work toward the modernization of the sector. The global apparel market is nearly USD 250 billion and Africa seems determined to get its fair share of the cake.

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