Once considered a purely agricultural-based economy, the rise of the apparel industry has dramatically shifted Ethiopia into an industrial one. Due to the abundance of raw materials and a relatively cheaper labour cost, more international organisations are exploring Ethiopia sourcing for the apparel industry.
Here, we take a brief look at the textile industry in Ethiopia and explore some of the benefits and challenges that exist in this sector.
The textile industry in Ethiopia
One of the first apparel factories in Ethiopia was established in 1939 and the country has never looked back since. Major investments and growing global demand for sustainable sourcing have led the country’s textile industry to form massive joint-trade contracts with some of the world’s primary markets.
The Ethiopian Government also quickly capitalised on the abundance of raw materials in an agricultural-driven nation to encourage foreign and local investment into the sector. Various free trade agreements, tax-free imports, lenient income tax regulations, and favourable capital sources in the form of bank loans have been crucial in encouraging the growth of the textile industry, boosting the country’s economy.
Over the years, the apparel industry has gone from being an undeveloped sector to one of the most significant contributors to the nation’s GDP. Previous high unemployment numbers led to more job opportunities in this sector, which, when combined with the lower labour costs, allowed international buyers to take advantage of the country’s resources and invest in the industrialisation of various sectors in the country.
Learning from previous mistakes
The Ethiopian government has been learning from issues in the major textile hubs around the world to improve its efficiency and operational capacity. It has been closely monitoring the Bangladesh textile industry and how it overcame massive hindrances like the Rana Plaza disaster.
The Ethiopian workforce already enjoys working time legislations, which is crucial to ensure product quality compliances. It has been complying with strict environmental standards to align better with the rising importance of sustainable sourcing.
There are already ambitious plans in place to construct industrial estates for major textile players, each with its own water and waste treatment plants, massive halls, and reliable electricity supply. These areas abide by the global safety standards, with appropriate certification for accident prevention, emergency exits, fire prevention, waste treatment, etc.
Major challenges in the Ethiopian textile industry
While the textile industry has been a significant reason for the boost to Ethiopia sourcing, the sector is still riddled with several challenges that need resolving.
One of the major hindrances in the rapid industrialization of the nation’s textile industry has been the shortage of skilled labour. Most of the workforce lacks the necessary education, vocation, and motivation required to operate industrial-grade machines, which impacts the manufacturing output and decreases operational efficiency.
The country is still battling other issues like poor infrastructure, regular power cuts, and the late adoption of newer technology and machinery. Long production cycle times and delivery issues cause expensive delays in importing costly equipment, which is a major concern in widespread production.