Building the capacity of indigenous textile companies for competitiveness in a liberalized Ghanaian market

Abstract

This study examines the competitiveness and performance of indigenous textile companies in Ghana, focusing on the challenges they face in a liberalized trade environment. Despite the textile industry's vital role in economic development, particularly in job creation and poverty reduction, Ghana’s indigenous textile sector has experienced a sharp decline. Trade liberalization has exposed local firms to intense competition from low-cost imports, particularly from China, resulting in the closure of many local businesses and a loss of market share. The study examines the capacity-building needs of these firms, highlighting issues including outdated technology, limited access to raw materials, inadequate infrastructure, and workforce skill gaps. It also assesses how these challenges affect employee well-being. Using multiple case studies and descriptive observational methods, the research gathers data to draw conclusions and recommend strategies for industry recovery. The approach is based on a phenomenological perspective within qualitative research. The case study design is ideal because it enables an in-depth understanding of Ghana’s indigenous textile industry, given the numerous historical, economic, and socio-political challenges it faces. Data collection involved face-to-face interviews, document reviews, and observations, providing comprehensive triangulation and verification of findings. This design supports multiple perspectives and explanations, highlighting how factors like human capital development, organizational culture, absorptive capacity, and external market forces influence competitiveness. A combination of purposive and stratified sampling techniques was used. Data were analysed descriptively and organized into themes, which helped identify, interpret, and understand patterns of meaning within the data. The thematic analysis offered rich insights into the performance, challenges, and capacity needs of Ghana’s indigenous textile companies. The study examines trade liberalization, its impact on performance and competitiveness in Ghana’s textile industry, its effects on employee well-being, and trade policies in developing countries. By reviewing the industry’s strengths, weaknesses, and capacity gaps, the study proposes a capacity-building framework to enhance competitiveness and sustainability. Key recommendations include technological upgrades, workforce development, improved supply chain management, and policy reforms to provide targeted support. Lastly, the study highlights the importance of collaboration among industry stakeholders, policymakers, and international partners to revitalize Ghana’s indigenous textile sector and ensure its long-term growth and contribution to the national economy.