Ethiopia textiles and garment sector exports picking up

The Ethiopian textile and garment sector is under growing pressure to expand more rapidly with the Ethiopian Government setting ambitious goals for the industry. According to the Textile Industry Development Institute during the first half of the current budget year Ethiopia has secured over US$ 60 million revenue from export of textiles and garment. The revenue achieved exceeds the previous year’s performance by US$ 15 million.

The government has set a target for the textile industry to increase its annual earnings to US$1bn by 2016 and also hopes to attract foreign direct investment worth US$1.6bn to build 191 new textile and clothing plants.

The Institute is strongly supporting the textile industries to reach the target set of one billion dollar for the Growth and Transformation Plan (GTP) period. However the performance during the three years of the GTP period has been low, despite all efforts being exerted to achieve the target.

The country has secured only US$ 305 million during the reported period against the target of US$ 637 million. The main reason for the reduction is shortage of quality cotton supply due to which the country is importing cotton to supply the industries.

A key element of the industry’s expansion is to increase the volume of cotton produced in the country. There are 3 million hectares available for cotton farming in Ethiopia, but only 30-40,000 hectares are currently being used [around 1% of the available land].

They need to not only produce much more cotton, but also continue to add value to it through manufacturing, so that they grow in an integrated way.