The export of readymade garment (RMG) witnessed nearly 9 percent year-on-year rise to USD 30.61 billion in the just-concluded fiscal, thanks to the government for its praiseworthy endeavors to raise the export earnings from RMG sector. Bangladesh needs over 13 per cent growth for achieving the USD 50 billion export target. But increasing production cost has become an overwhelming challenge to the country’s leading export earning RMG sector. A total of 18 percent increase in production cost has occurred over the last two years. Hence, it is high time for the country and authorities concerned to take necessary steps to decrease the production cost.
Reportedly, in the last fiscal year, woven garments export bagged USD 15.43 billion, which is more than 50.39 percent of the total RMG export earnings. In FY18, the earning stood at USD 30.61 billion against the target set at USD 30.16 billion, while the earning was USD 28.15 billion in FY17.
The knitwear export was USD 15.19 billion in the last fiscal, which is 0.59 percent higher than the target of USD 15.10 billion for the period. On the other hand, in the FY17, the knitwear earning was USD 13.77 billion. In the last fiscal, the earning from the woven garments export exceeded the target by 2.43 percent, and it was also 7.18 percent higher than that of the previous fiscal. In FY17, the turnover was USD 14.39 billion.
In accordance with the above data, it can be said that the RMG export maintained a positive growth in the last fiscal. Bangladesh has completed almost 90 percent of the requirements set by Accord and Alliance. Also, Bangladesh had made impressive progress in addressing key Occupational Safety and Health (OSH) and working condition issues in the garment sector over the last four years.
But according to a recent study, low productivity, shortage of mid-level management professionals and limited backward and forward linkages are among major challenges that need to be addressed for further expansion of the country’s RMG sector. The other challenges identified by the study included dependency on import of raw materials, inadequate supply of utilities, transport services and high production costs, limited facilities in ports, lack of interest in financing small and medium producers, administrative and regulatory constraints. Therefore, we urge relevant authorities to come up with effective measures to tackle the challenges in no time. Also new and potential markets must be explored for diversification and sustainability of the sector.