Cape Town - The sharp drop in the value of the rand could negatively affect the clothing industry, the Cape Chamber of Commerce warned on Friday.
“In the Western Cape, the clothing industry will have to pay more for imported textiles, and as 80 percent of the fabric used by local manufacturers is imported, the industry could be hurt,” said chamber director Viola Manuel.
“On top of that, there is a 22 percent duty on imported fabrics. This adds up to the threat to jobs.”
On Thursday, the rand fell to around R10 against the US dollar a few hours after President Jacob Zuma tried to assure the nation and investors that government was dealing with the instability in the mining sector.
The rand was at its lowest level in four years.
By Friday afternoon, it was hovering around R10.15 to the US dollar.
Manuel said the sudden depreciation should be seen as a strong negative comment on the management of the country.
“It is clear that the world has not been impressed by the instability in industrial relations and some of the recent decisions on matters such as electricity and toll roads, as well as the scandals that have come to light.”
She said it was a tragedy this came at a time when Africa was poised for years of growth, driven by a boom in natural resources, particularly oil and gas.
“The sudden depreciation of the rand would create many problems for business. Some exporting industries would benefit, but others which rely on imports would be hurt,” she said.
Manuel said government would have to review a whole range of decisions and rule out the purchase of “unnecessary” luxury aircraft. - Sapa