Cape Town - Labour and business in the clothing, textile, footwear and leather (CTFL) sectors are deeply concerned about the impact of the downgrades of South Africa’s debt on our industry and the broader economy, the CTFL Stakeholder Initiative said on Tuesday.
"The downgrades by various rating agencies during - and possible future downgrades - will raise the cost of borrowing for the workers, businesses, government and consumers. This will have a negative impact on government spending on CTFL support measures and incentives, on investments by businesses and on spending by consumers on the products made in CTFL factories," the CTFL Stakeholder Initiative said in a statement.
"We are concerned that it could lead to increased factory closures and retrenchments in the CTFL sectors, placing an even greater strain on South Africa and its poor. This is not good news, given our already high levels of unemployment."
The CTFL Stakeholder Initiative pointed out that these factory closures and retrenchments will take place, if a proper and credible turnaround plan is not formulated immediately, and implemented expeditiously.
"The stagnant economy has already caused our sectors to lose more jobs than in recent years, mainly as a result of fewer orders from retailers and less procurement from government and corporates," it said.
To understand the impact of the downgrades - including of possible future downgrades - and to develop measures to mitigate its impact, CTFL trade unions (SACTWU and NULAW) and employer associations have convened a conference to take place on September 6 and 7 at the Coastlands Conference Centre in Durban.
About 500 delegates are expected, including CTFL factory workers, union officials, factory directors and managers, service providers, government officials, the retail sector, as well as delegates associated sectors like cotton farming.
"The whole value chain will be represented, as we require a united response," CTFL Stakeholder Initiative.
Several senior government leaders have been invited to address the conference and discussion papers have been commissioned from senior researchers at Wits University’s Corporate Strategic Industrial Development (CSID) research programme and the Industrial Development Corporation (IDC).
The outcomes of the conference will be used to construct a plan to mitigate the impact of the downgrades on the CTFL sectors.
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