ADDIS ABABA – Research by Apparel Insider has unveiled a decidedly mixed picture about the much-hyped Ethiopian textile market. The Government of Ethiopia has set itself a target of US$30bn in textile exports by 2025, however, from our findings we believe this to be wildly optimistic. Many brands were reluctant to talk about their sourcing from the country, while US brand Gap, which in late 2017 was reported to be having clothing made in the country, told us: “Ethiopia is not nor has been one of our approved sourcing countries.”
Nate Herman, senior vice president of supply chain at the American Apparel & Footwear Association, which represents many leading US apparel brands, told us: “There are a lot of members interested in sourcing from Ethiopia, and many are either actively investigating possibilities or are already working there. In fact, US imports from Ethiopia grew by 5,824 percent between 2010 and 2017 and it is now the 18th largest supplier of apparel to the US market.
“Furthermore, many of our members see Ethiopia as more than a simple garment sourcing destination, but as having the potential for fully vertical manufacturing – something that doesn’t usually happen until 5-10 years after an initial push for garment production. Having trade preference programmes with many key retail markets is also important.”
Herman’s take is that Ethiopia is a long haul bet for brands. “A number of members are committed to creating a sustainable sourcing strategy in Ethiopia, with the goal of being there for the long haul,” he added. “A lot of this is possible because of the extension of AGOA benefits until 2025, which provided certainty for businesses, along with the willingness of the Ethiopian government to support the growth of the industry. Of course, building up infrastructure in and around Ethiopia will also open up possibilities for sourcing throughout the region.”
In March, more figures showed that Ethiopia earned US$68.5m in revenue from the export of textiles and garments over the previous eight months of the current Ethiopian fiscal year, which began on July 8, 2017. This was a 23.1 per cent increase compared to revenue earned in the corresponding period in the previous year but still 50 per cent below the government’s target. Also noteworthy is that just US$12.6m of this revenue was secured by 58 local companies, while foreign-owned companies generated the remaining balance. Government sources blamed managerial and technical limitations, inadequate supply of inputs, and shortage of skilled manpower for the disappointing figures.
Ethiopia is the cover story for the first printed issue of Apparel Insider.
Image: courtest of Industriall Global Union
