Business opportunities in the Ethiopian tex- tile- and apparel sector are huge. With a large set of incentive schemes to attract FDI the Ethiopian government is determined to make the indus- try sector flourish.
Key Reasons for Making in the Textile and Aparrel sectors
- Abundant available workforce at very competitive costs: wages in Ethiopia are a fifth of China’s and half of Vietnam’s.
- Quality and productivity: Ethiopian workers produce as many polo shirts of the same quality per day as workers in Vietnam when using similar technology.
- A privileged geographic location: Ethiopia is located at the center of the world with easy access to international value chains, and has access to a state-of-the-art container port (Djibouti).
- Potential to develop a competitive cotton or textiles industry due to good climatic and soil conditions together with cheap hydro-energy (textile factories pay between US$0.78 and US$0.002 per KW).
- Duty-free access to the European Union (EU) and U.S. markets through the African Growth and Opportunity Act (AGOA).
- Strong export performance: the Ethiopian garment and apparel industry has grown an average of 51% over the last 6 years, with the UK accounting for 10% of Ethiopia’s textile and garment exports, with other countries in Europe taking 50% and the US taking 40%.
- Over 65 textile investment projects from international investors have been licensed in Ethiopia since 1992, with retailers such as H&M and Primark already sourcing clothing from Ethiopia.