US textile and apparel imports from Sub-Saharan Africa grew at a rapid pace in 2001, according to the latest issue of Textile Outlook International. Furthermore, they grew during a year when imports from Mexico fell, after soaring during the second half of the 1990s.

The main cause is the African Growth and Opportunity Act (AGOA), which is designed to boost the economic development of some of the poorest countries in the world. AGOA is also designed to encourage the use of US yarns and fabrics. But US textile manufacturers have yet to reap the rewards.

The impact on Sub-Saharan African trade has been rapid. US textile and apparel imports from Sub-Saharan Africa grew in volume by no less than 25.4% in 2001. By contrast, imports from all sources fell by 0.2% and those from Mexico declined by almost 10%. And yet the main benefits of AGOA - duty-free and quota-free access to the US market - did not become available to apparel exporters until the early months of 2001. And even then the benefits were only made available to a handful of countries.

AGOA was implemented as part of the two-part US Trade and Development Act 2000. In its early days the Act was described by a US industry spokesperson as an "Asia beater". The underlying logic behind this assertion was the fact that imports from Asian suppliers have a very low US yarn and fabric content. So, it is argued, any measure which promotes exports from suppliers who use US materials - while clipping the wings of Asian exporters who do not - has to be good for the US industry.

However, AGOA provides apparel makers in Sub-Saharan African countries with a number of options. One is to use US-made materials. Another is to use locally made materials. But best of all, under the Special Apparel Provision, apparel produced in poorer Sub-Saharan African countries can be made from any materials - even Asian ones. This helps producers in such countries to compete by using the world's most competitive fabrics. Madagascar, for example, has already benefited significantly from the Special Apparel Provision. In 2001 exports of textiles and apparel from Madagascar to the USA increased by almost 83%.

US imports from CBI countries declined by 2.2% in 2001, in spite of the fact that they have tended to grow much faster than most other sources in recent years.

Sub-Saharan African countries even beat Mexico. Imports from the latter fell by almost 10% in 2001, having grown at meteoric rates during the second half of the 1990s. In January 2002 alone, Mexican exports to the USA were down by 16% compared with a year earlier. The downturn is reported by a Mexican industry association to have caused widespread factory closures, 5,000 job losses and an increase in illegal trade.

The speed with which AGOA has captivated US buyers is illustrated by this year's Cotton Council International Sourcing Summit - held in mid-April. Normally, the summit's geographical scope is limited to Mexico and the Caribbean - the US industry's traditional "offshore manufacturing" locations. But the 2002 event, held in Miami, Florida, included representatives from Sub-Saharan Africa for the first time.

The region's newly-acquired high profile is, however, out of proportion to its actual importance. In spite of rapid growth, Sub-Saharan Africa supplied less than 1% of total US textile and apparel imports in 2001.

This leaves plenty of scope for further growth. But whether growth continues at a rapid pace will depend to a large extent on how much foreign investors are prepared to invest in the region.

One of the earliest to invest in Sub-Saharan Africa after AGOA was enacted was the Malaysian firm Ramatex. However, not all went smoothly. Ramatex first intended to invest in South Africa. But after some wrangling with the South African authorities, it chose instead to move to Namibia.

Sub-Saharan Africa is also host to a number of other, longer established inward investors who know the region well, and who stand to benefit from "first mover" advantages. Many, like Ramatex, are from Asian countries, and have investments in countries such as Lesotho, Madagascar, Malawi, Mauritius and South Africa.

Most importantly, all of these investors appear to be there for the long term. US buyers, by contrast, are notoriously fickle. In 2001 many did little more than dip their toes in the water. Despite assertions that they want to build long-term relationships with suppliers, they do not have to worry about recouping investments in machinery and factories. If they like what they saw in Sub-Saharan Africa they will probably come back. If not they can easily move on elsewhere.

Even those highly committed to southern Africa would quickly move away if significant currency depreciations made other sources more competitive - as happened during and after the Asian financial crisis. They could also be frightened off by social or political disruption - as appears to be happening in Madagascar, one of the jewels in the Sub-Saharan African crown.

For the region as a whole, much will hinge on whether or not the Special Apparel Provision is renewed. This provides AGOA benefits to apparel producers in lesser developed Sub-Saharan African countries regardless of where the materials are sourced from. By buying fabrics from the most competitive sources, apparel makers in Sub-Saharan Africa have a fighting chance of competing in international markets. But the Provision expires on September 30, 2004 - three months before quotas are eliminated on exports from the rest of the world, including China.

After September 30, apparel makers in poorer countries will have to start using US or local fabrics. For the most part, these are more expensive - and local fabrics lack the variety and quality needed for international markets.

Furthermore, not all would-be investors are willing to fund long-term commitments in textile mills or verticalised operations. Many will want to invest merely in apparel-making operations. And unless they can have some assurance that the Special Apparel Provision is likely to be extended, few will be willing even to risk their capital in garment making operations.

Even if a decision were made to extend the provision, it could get stuck in the US legislature. This happened to the Andean Trade Preference Expansion Act (ATPEA), which was introduced in March 2001 to provide duty-free access to the US market for textiles and apparel exported from Bolivia, Colombia, Ecuador and Peru.

Long-term investment will certainly be needed if AGOA is to have any chance of achieving its primary task - that of improving the economies of some of the poorest countries in the world. Without firm commitments by industrialists and financiers, the spending spree by US buyers could turn out to be just a flash in the pan.