Ethiopian textile exports have grown under AGOA – Textile body chief
The African Growth and Opportunity Act' (AGOA), the free trade pact with the US provides preferential access to Sub-Saharan countries in to US markets till 2015 and also has special provisions for exports of textiles and apparels. This act was enacted to help these African countries open their economies and build free markets in the region. The main idea behind the act was to help these countries grow their economies, by opening up the biggest market in the world.
Fibre2fashion spoke exclusively with Mr Endalkachew Sime, Secretary General of the Ethiopian Textile and Garment Manufacturers' Association (ETGAMA) and asked him as to how much Ethiopia has taken advantage of the act, to which he said, “Ethiopia's performance under AGOA can be said to be slow for the period 2001-2005. Exports eligible under the newly-added AGOA product categories amounted to only US $0.2 million in 2001, the first full year of operation of AGOA”.
He continued, “This increased to $1.3 million in 2002, which exclusively consisted of textiles, apparel and agricultural products. AGOA/GSP exports have gone up steadily, but slowly, year after year since 2005, representing an increase by $4.8 million through 2007. Total AGOA/GSP exports were $5.1 million in 2005 and reached $7.2 million by the end of 2006. AGOA/GSP exports for 2007 reached $8.9 million, the highest ever since Ethiopia started exporting under AGOA”.
He added, “The growth in export value has continued showing remarkable increase in the year 2008. The year-to-date total AGOA/GSP exports from Ethiopia to the U.S grew from $5.423 million in 2007 to $18.087 million in 2008, indicating more than a two fold increase. Ethiopia has continued to increase exports and from January-June 2008, Ethiopia's AGOA exports reached $9.7 million, surpassing $8.9 million achieved during the entire 2007 calendar year”.
“The latest data available for almost every product exported under AGOA/GSP show large increases, including textiles and apparel (up 162%), foliage/bouquet filler (up 115%), live plants (up 122%), fruits and nuts (up 1,495%) and also this achievement has come on back of a reputation carried by the Sub-Saharan countries of exporting commodities, which used to account for a majority of exports to the markets of the US in the last few years”, he concluded by saying.
Next we asked him to reveal the main reasons for Ethiopia not being able to take advantage, to which he replied by saying, “Lack of information on market opportunities in US which applies to the period from 2001-2005; low industrial capacity and base; relatively low skilled and inadequately trained labor force; lack of proper production management skills and last but not the least, existence of some bureaucratic challenges in order to derive benefit from the various government incentives”.
To conclude the interview we asked him as to, if the real benefits of the act had been garnered, what in his opinion could have been the situation of the Ethiopian industry in current times, to which he explained by saying, “The number/types of export items could have been diversified, as the current export is mainly of textile and garment items, along with which there could have been strong value chains of the various economic sectors starting from inputs to final product and beyond”.
“Currently, there are limited value adding establishments within all sectors that can produce products that meet international market requirements and also, currently, there are few vertically integrated manufacturing operations that suit export market operations. So, if the above conditions had been met, export volumes could have been better than the actual performance, at least closer to that of Kenya, a country which has benefited from non-oil exports”, he observed.
Fibre2fashion News Desk - India