Overview of the sector
- Ethiopia’s textile and garment industry witnessing rapid growth, as a number of domestic and multinational firms are being engaged in the production of textile and apparel for domestic and global markets. In the path to industrialize Ethiopia, the sector is given prominent position in boosting export, creating job opportunities, and as a model to other sectors as well.
- This recent surge in Ethiopia’s textile and apparel production and export to the global markets shows that the country has the potential to become one of the leading textile and Apparel hubs of Africa, of exporting the equivalent of 30 billion USD with bold vision of transforming the action into compelling new apparel sourcing hub for brand, retails and their suppliers.
- Due to focused strategy and support of the government, in recent years, Ethiopia has grown spectacularly as a sourcing destination for apparel in recent years attracting most of the FDI in the sector.
Policy and strategy
- The sector has become a top priority for Ethiopia as part of its goal to become a middle-income country by 2025. The key objective is to make the sector globally competitive and to bring the necessary structural transformation to the nation’s economy to export industrial outputs, create thousands of jobs, attract much-needed foreign currency and above all, contribute to poverty reduction.
- Plan 2020: generates USD 1 billion export earnings over 300,000 employment opportunity.
- Established the Ethiopian Textile Industry Development Institute to enhance skills and technologies in the sector.
Key Reasons for Investing
- An abundant workforce at very competitive wages, competitive cost of electricity and potential for backward and forward linkage,
- Ethiopian workers produce as many polo shirts of the same quality per day as workers in Vietnam when using similar technology.
- A privileged geographic location: Ethiopia is located at the center of the world with easy access to international value chains, and has access to a state-of-the-art container port (Djibouti).
- Potential to develop a competitive cotton or textiles industry due to good climatic and soil conditions.
- Duty-free access to the European Union (EU) and U.S. markets through the African Growth and Opportunity Act (AGOA).
- Ginning, integrated textile mills, spinning, weaving and/or knitting, dyeing and printing,
- Production of garments; the manufacturing of knitted and crocheted fabrics, carpets, and sportswear, among others.