ADDIS ABABA – Ethiopia’s textile and garment sectors achieved less than half of their export target for the 2017-2018 fiscal year. The Government has pinned huge hopes on textile and garment exports and has been on a major charm offensive aimed at wooing inward investors with a range of financial sweeteners these past 18 months. However, the sectors achieved a paltry 46.3 per cent of their export targets for the financial year. Our sources suggest growth is being hampered by a range of factors, including very low productivity levels, poor training, high staff turnover, technical shortcomings and chronically low wages.
The Government’s plans to grow textile exports to US$30bn by 2030 are looking increasingly far fetched, with exports hovering around the US$100m mark. We know H&M has made a long term commitment to Ethiopia and that several US brands are currently considering it. Our understanding, however, is that other brands have dipped their toes in the market there but deemed it not quite ready.
Meanwhile, local Ethiopian cotton producers have announced they will increase cotton production by 40 per cent in the current fiscal year. The country is looking to become self-sufficient in cotton to provide a feedstock for its textile industry and cut down on cotton imports.
The vice president of the Ethiopian Cotton Producers Association (ECPA) said Ethiopian cotton producers last year produced 60,000 tons of ginned cotton. It added that the local cotton demand by textile industries is estimated at 70,000 tons, and that the balance has been covered by imported cotton from India.
As more investors are joining the sector and the existing cotton growers are expanding their plantations the ECPA expects 100,000 tons of ginned cotton will be produced this year. We would take such a figure with a large pinch of salt.