Bangladesh’s economy has transformed from a reliance on jute to a global textile and garment powerhouse. Poverty rates have halved and gross domestic product has increased significantly. In addition, market-oriented policies, privatization, trade liberalization, and strategic foreign investment have been key to accelerating Bangladesh’s garment exports and industrial growth.

As Bangladesh aims to diversify its economy and move up the value chain, Africa has emerged as the next frontier for the garment industry, benefiting from similar growth opportunities and international support for sustainable and inclusive industrialization, Femi Akinrebiyo, Global Manager of Manufacturing Investment and Trade Supplier Finance at the International Finance Corporation (IFC), wrote on the World Economic Forum’s blog.

He noted that Bangladesh’s economy was in shambles in the early 1970s. Having just gained independence from Pakistan after a nine-month war, it emerged as a very poor, densely populated country, largely dependent on jute production and subsistence farming. It was unable to feed its people. In 1974, the country was hit by a severe famine. A World Bank economist visiting the western part of the country at the time described it as ‘the morning after a nuclear attack’.

Then, in less than a decade, a government campaign to attract foreign investment bore fruit and Bangladesh embarked on a path that would transform the country from an agrarian economy into an industrial powerhouse. Textile and garment production can be described as a miraculous economic and social comeback that developing countries today strive to emulate.

Bangladesh’s shift to market-oriented policies, including privatization of industry and trade liberalization, has led to a surge in garment exports. Cotton T-shirts, pants, pullovers and denim have become its favorite spots, becoming the ‘engine’ of ready-to-wear clothing growth. In the last 10 years, Bangladesh has grown its economy to the 35th largest in the world, halved the poverty rate and created jobs for millions of people. In the decade before the Covid-19 pandemic, the economy was growing at an annual rate of 7 percent and per capita gross domestic product (GDP) had risen to about $2,500, surpassing even neighboring India.

Such a track record is the envy of Africa’s emerging economies today. There is no ‘one-size-fits-all’ recipe for industrialization. But countries with large, low-cost workforces, sufficient renewable resources and preferential trade agreements have much of what it takes to build the next generation of textile and apparel powerhouses. And unlike Bangladesh, Africa has the added advantage of domestic cotton. In 2022, Bangladesh produced 20 percent of the world’s exported cotton T-shirts, worth $9 billion, although less than 2 percent of the cotton labeled ‘Made in Bangladesh’ was produced.

It is perhaps a happy thing that Africa’s interest in expanding the garment industry coincides with Bangladesh’s ambition to diversify away from a single sector. Ultimately, Bangladesh aims to become a high-income country by 2041. Although currently 84 percent of Bangladesh’s export earnings come from apparel alone, Bangladesh deserves credit for its remarkably successful industrialization policies. This includes allowing duty-free import of machinery into export-oriented zones and negotiating preferential trade agreements with the United States and Europe.

Bangladesh is famous for this strategy. It has developed a sophisticated garment sector. It employs 4 million people in more than 3,500 factories and exports $43 billion worth of goods to 167 countries. Cutting, sewing and assembling garments is difficult and tiring and relies on cheap labor. Export-led growth models usually don’t last forever. But Bangladesh is at the heart of the success story and is on the next stage of planning.

The garment industry is largely dominated by a female workforce, who have benefited from the economic growth far beyond the factory floor. I witnessed this when I visited Bangladesh in October 2023. Programs like Better Work and Gender Equality and Returns, a partnership between the International Finance Corporation (IFC) and the International Labor Organization (IFC), have improved working conditions in factories, increased gender diversity, and created management opportunities for women.

The social impact of this shared prosperity is far-reaching. Three-quarters of Bangladeshi women are educated, more likely than their regional neighbors to pursue education, have high-paying jobs, and have healthier children. With a little help from the international community, the social and sustainable benefits of development will be transferred to the next cluster of garment-producing countries. This is a development trend we have seen before.

The story of Bangladesh’s creation began in much the same way. In 1978, Bangladeshi company Desh Garments Limited and South Korea’s Daewoo signed a joint production agreement. Korean companies were outpacing the textile and garment industry. They recognized that Bangladesh’s cheap labor could help them expand their international reach through affordable clothing brands. The arrangement was a bilateral success. Bangladesh’s GDP grew from $18 billion in 1980 to $460 billion in 2022, and it is now one of the world’s most important textile and apparel exporters.

Now, IFC is helping to accelerate the next major industrial transformation. This evolution looks south to Africa, where conditions are ripe for sustainable and inclusive industrialization. Programs like the African Growth and Opportunity Act have already provided duty-free access to U.S. markets and trade in Kenya, Egypt, Ghana, Ethiopia, Madagascar, and other countries, and have become part of the supply chains of Tommy Hilfiger, Uniqlo, Children’s Place, Calvin Klein, and Walmart. In Morocco, just a short hub from Europe, companies are producing for brands like Zara to supply European markets.

To support this historic supply chain transformation, IFC sponsored a roadshow in June 2023 that brought African manufacturers to Bangladesh and Sri Lanka to explore opportunities for interregional manufacturing partnerships. Some deals have already been arranged. I believe Africa is ready for many more investments that can drive sustainable, resilient, and profitable economic growth and perhaps usher in a new era of Tiger economies in the Global South.