What is the cost of Africa’s continued reliance on raw cotton exports?

Africa is one of the largest cotton producers in the world. 37 out of 54 African countries produce cotton, and the region accounts for about 20% of the world’s cotton production. Cotton farming is a vital source of income and livelihood for millions of Africans, especially smallholder farmers, who cultivate it using rain-fed and crop rotation methods.

However, while African cotton fibre accounted for 7.5% of global production in 2022, sub-Saharan countries exported more than 81% of their raw cotton rather than transforming and using it locally. This situation has several negative consequences for the continent’s economic development and even its environmental sustainability.

Beyond Africa’s cotton fields

Cotton is a dynamic crop. It is the most widely used natural fibre for clothing and apparel, as it is soft, breathable, durable, and easy to wash and dye. Cotton can be woven into different types of fabrics, it can also be blended with other fibres, such as polyester, rayon, or wool, to create different textures and properties. The global cotton textile and apparel market was valued at $1.1 trillion in 2020, making the industry one of the most dynamic and labour-intensive sectors in the global economy.

Cotton is not only a source of fiber, but also a source of oil, seed, and lint. Cottonseed oil is extracted from the seeds of the cotton plant and can be used for cooking, baking, salad dressing, and margarine. It can also be refined into biodiesel. The residue left after the oil is extracted, known as the cottonseed meal, can be used as animal feed, fertilizer, or protein supplement. The cotton lint, the short and fuzzy fiber that covers the cottonseed, can be used for making paper, cardboard, cotton swabs, bandages, and filters. According to the World Economic Forum, the value of cotton lint is about four times higher than that of seed cotton, and the value of finished garments is about 20 times higher than that of lint.

The leftover material from cotton production known as cotton waste can be recycled, reused, or converted into useful products, such as soap, candles, mats, rugs, pillows, quilts, and insulation. It can also be composted, fermented, or gasified to produce organic fertilizer, ethanol, or biogas. The global cotton mill consumption is projected to grow by 1.3% per year over the next decade, reaching 28.5 million tonnes in 2030.

However, Africa’s share of this cotton market is very low, as most of its cotton is shipped to Asia, especially China, Vietnam, Bangladesh, and Turkey, where it is used in the textile industry. The Asia-Pacific Textile Market size is estimated at $381.47 billion in 2023, expected to reach $432.69 billion by 2028. In contrast, Africa’s textile and apparel industry is underdeveloped, fragmented, and uncompetitive. Africa also produces about 2.5 million tonnes of cottonseed, which is 5.8% of global production, yet only 75% of the seed is crushed for oil and seed meal, and the rest goes unused. As a result, Africa’s cotton value chain is truncated, and the continent misses out on the potential income, employment, and export diversification that could be generated from processing its cotton.
Unraveling the Cotton Paradox

One of the reasons why Africa exports most of its raw cotton rather than transforming and using it locally is the lack of adequate infrastructure and technology for cotton processing. Cotton is almost entirely cultivated by smallholder farmers in Africa, with very few major plantations. The African cotton processing market is constrained by high energy costs, outdated machinery, low productivity, and poor quality standards. Moreover, the African textile industry has since declined due to competition from cheaper imports from Asia, especially China, which has a large market share in the global textile and clothing sector. In recent times, only Egypt has made efforts to revive its textile manufacturing industry. Hence, Africa relies on exporting their raw cotton rather than transforming and using it locally.

However, relying on merely exporting raw cotton exposes African countries to the volatility and uncertainty of the global cotton market, which is influenced by various factors beyond their control. These include fluctuations in demand and supply, changes in consumer preferences, competition from synthetic fibers, trade policies and subsidies of major producing and consuming countries, exchange rate movements, and weather shocks. For example, during the COVID-19 pandemic, there was a severe impact on African cotton producers, who saw their incomes and livelihoods threatened by the collapse of the market. Moreover, the dependence on raw cotton exports makes African countries vulnerable to the concentration and bargaining power of a few buyers, who can dictate the terms and conditions of trade and capture most of the profits.

Moreover, exporting raw cotton entails a significant loss of natural resources and environmental services, as cotton production requires large amounts of land, water, and inputs. Cotton is a thirsty crop, consuming about 2,700 litres of water per kilogram of lint. In some regions, such as the Lake Chad basin, cotton irrigation has contributed to the depletion and degradation of water resources. Cotton also uses about 6% of the world’s pesticides and 16% of the world’s insecticides. These chemicals can have negative effects on human health, biodiversity, and soil fertility and contribute to climate change. African countries essentially export their scarce and valuable natural resources without receiving adequate compensation or investing in their conservation and restoration.

The economic implications of Africa not using its raw cotton locally are significant. The African cotton processing market has the potential to reach $7.34 billion by 2028, growing at a CAGR of 4.91% during the forecast period (2023-2028). By exporting raw cotton, Africa loses the opportunity to add value to its products and create more jobs and income for its people.