The Ethiopian Textile Expo says that “The Ministry of Industry (MOI) has targeted the the textile sector as a key contributor for generating foreign currency. The authorities aim to have yearly revenue of approximately US $500 million by 2013, for which the Government must approve approximately 190 enterprises with the ability to make capital investments of US $1.6 billion. These companies and factories would include approximately 48 threading, 31 grey textile production, 22 knitting sector, 53 woven, 31 garment and 6 finished textile enterprises. There is also a commitment to support the industry throughout the vaue chain, thereby ensuring that costs are contained domestically, instead of requiring foreign exchange to purchase products such as trim and components.”
A growing number of major retailers are sourcing textiles and clothing from Ethiopia, as the country’s industry undergoes a major expansion program because they agree that Ethiopia has the largest potential domestic market in Africa for textile products.
They include major UK retailers, H&M, Tesco and Primark, and the Ethiopian Textile and Garment Manufacturers Association expects more to follow suit. Ato Fassil Tadesse, President of the Association, says the UK now accounts for 10% of Ethiopia’s textile and garment exports, with other countries in Europe taking 50% and the US taking 40%.
In the last financial year, Ethiopia’s textile and clothing exports grew 28% to US$84.6m. The government has set ambitious goals for the industry, aiming to increase earnings to US$1bn by 2016. It also hopes to attract foreign direct investment worth US$1.6bn to build nearly two hundred new textile and clothing plants in the same period. Ato Fassil says these goals are “on track,” with a growing number of manufacturers from overseas, particularly Turkey, India and China, investing as well as an increasing number of local companies.
A key element of the industry’s expansion will be increasing the volume of cotton produced in the country. There are an estimated 3 million hectares available for cotton farming in Ethiopia, but only 30-40,000 hectares are currently used.