The Ethiopian Investment Commission (EIC), in consultation with the Ministry of Trade and Industry (MoTI) and the Ethiopian Textile Industry Development Institute (ETIDI) has launched a strategy and policy recommendation document for the Ethiopian textile and apparel sectors. Titled ‘Realizing New Productive Capacity in Ethiopia’s Textiles and Apparel Sector: Strategy and Policy Recommendations,’ the 157-page document includes overviews of the international and Ethiopian apparel market and value chain, identifies key challenges facing apparel producers and offers policy recommendations with an implementation roadmap.
Development of the textile industry is a national priority for the Government of Ethiopia, as reflected in both the first and second Growth and Transformation Plans (GTP). GTP I set an ambitious export earning target of USD 1 billion by 2014/15. GTP II continues to emphasize the development of the sector, and aims to improve production capacity, productivity, quality and competitiveness, and creation of sustainable and reliable input supply. The current aim is to achieve $30 billion in textile and apparel exports by 2025, with a vision to lead the African textile and garment sector in global competitiveness.
Through targeted relationship building and by providing generous incentives, the Government of Ethiopia has made concerted efforts to attract global brands and manufacturers into its nascent textiles and apparel industry. This has resulted in an emerging, dynamic, and export-oriented textiles and apparel industry in Ethiopia. However, the sector continues to face key challenges which hamper its progress to meet expectations.
The strategy identifies five binding constraints: banking/access to FX; workforce development; customs and logistics and IP development and local capability support, as well as three thematic constrains: incentives (do not address the challenges being faced), promotion (not sustained) and institutional arrangement. For each challenge area, policy recommendations are made and an implementation roadmap proposed including dedicated financing facilities for exporters and tailoring incentives to address the unique challenges.
The overall objective of this strategy is to build on the existing sector-specific studies, and develop policy recommendations to unleash growth.
This study was supported and managed by Enterprise Partners. The study team was led by Equiception and Dalberg, with local support and input being provided by First Consult, Enterprise Partners and the Ethiopian Garment Manufacturers Association.
To download a copy of the strategy, click here.