Textile industry structure and government conduct : assessing the impact of the duty credit certificate scheme on industry performance

Abstract

The clothing and textile sector in South Africa has forever been a contentious sector insofar as its historic labour augmenting capabilities are concerned. The industry has developed a certain structure, in large part as a result of years of government intervention (conduct). The performance of the sector, given the conduct by government is the primary object of investigation in the paper. Finding that production and employment (as indicators of industry performance), have been on a long run declining path, the secondary and main object of investigation then turns to a behind-the-scenes look at the workings of the government’s Duty Credit Certificate Scheme (DCCS). The paper illustrates how the DCCS explains for much of the distortions that altered industry conduct and a resulted in a dwindling production performance.