Production trends and decline in Ghana’s textile industry: historical analysis and causative factors

Abstract The Ghanaian textile industry, once a thriving sector, has experienced a prolonged decline over the past four decades, marked by significant reductions in production capacity, employment, and competitiveness. This study analyse the output of the textile industry and subsequently examine the causes of the decline of Ghana’s textile industry. Guided by the theory of comparative advantage, the research investigates how globalization, trade liberalization, and inefficient domestic policies have contributed to the industry’s challenges, including competition from cheaper imports, counterfeit products, and rising production costs. Using a qualitative approach and historical case study methodology, data were collected through interviews, observations, and document analysis. Key stakeholders, including textile manufacturers, government officials, labor unions, and retailers, provided insights into the operational and policy-related barriers to industry revival. The study reveals a significant decline in Ghana’s textile industry output, dropping from 130 million yards in 1977 to just 15 million yards in 2017, highlighting the impact of foreign competition, smuggling, high production costs, and outdated manufacturing technology on the industry’s performance. Againg, findings highlight the critical impact of trade policies, smuggling, and consumer behavior on local production. This research underscores the urgent need for strategic interventions to enhance competitiveness, improve branding, and enforce intellectual property rights. Recommendations include fostering innovation, improving market access, and revisiting trade policies. These findings offer a foundation for policymakers and industry stakeholders to implement targeted measures aimed at revitalizing the Ghanaian textile sector and restoring its contribution to economic development.