In contrast to its ripe sources and potential, this African country is overlooked in the global market.


Ethiopia, the landlocked country located at the horn of Africa is the oldest independent country of Africa. A land of contrasts and extremes, the place is good in textile and garment making. Clothing industry today has become global, with multinational companies seeking for new options. Despite all its profitable sources, Ethiopia remains overlooked in the global textile arena.


Ethiopia has enormous prospective for garment exports. Despite its potential, development of its textile sector has been constrained over the years. Lack of modern technology, bureaucratic rules, and regulations, financial constraints, mismanagement, and inadequate infrastructure deteriorate the industrys growth. Their textile products do not figure among the top 10 export items of the country.


Ethiopian Government is desperate to enhance the textile and garment industry. Its strategic policy gives top priority to the development of textile and apparel industries of the country. The countrys Prime Minister Mr. Meles Zenawi positively asserts that the countrys industrial sector is expected to grow at a higher pace than agriculture, in the forthcoming five years. The country is also expected to uphold a strategy of export-driven industrialization, while drawing investments would remain its main focus. Enhancing the performance of the garment factories require an improvement tool touching all the aspects of the garment making process.


Ethiopia aims to increase its exports by 110% in the coming 5 years. During 2005-06, Ethiopias exports amounted to 11.1 million USD, and soared upto 22 million USD during 2009-10. The country positively hopes to achieve a target of 500 million USD during 2010-11. The countrys labor costs are lower comparatively with the other countries that are a preferred sourcing destination for global apparel makers. Power costs are also less, making Ethiopia more competitive in the global garment market.

Country-wise comparison of labor and power costs

Labor costs (USD per hr)




Power costs (USD per hr)




With an intention to industrialize its agro-based economy, the Government is seeking investments from firms in China, Turkey, and specially, India. In response to the call, several Chinese and a few European firms are showing interest to invest in the leather industries of Ethiopia. Ethiopia was once flooded with second hand clothing. Used clothing from US, and EU were deterring the local apparel production. Ban on importing second hand clothing has also benefited the country.


 

Focus Areas:


The Government need to focus of the internal factors, that are currently the constraints so as to enhance the performance of the garment industries.

  • Technological advancements in areas like sewing, finishing, cutting etc are below the average level.
  • Labor charges are lesser, comparatively, but most of them are untrained and unskilled.
  • The quality control, and management stytems of the garment factories are very weak and needs appropriate attention.
  • Garments made in the Ethiopian industries are not categorized as fashion or quality garments. To capture the export market, attention should be paid in the standard of the garments, and the delivery time.


Ethiopia
has the potential to provide basic production factors to its textile sector. It is poised to grow at a higher pace in the next five years. If the industry leaders have their way, Ethiopia will become a globally competitive, and value added apparel hub.


References:


Bds-ethiopia.net

Sify.com


Image courtesy:


discoversaipan.com