Ethiopian textile export touch USD41.1mn last six months of Fiscal year

Export performance of the textile sector is lagging behind plan during the 2015/16 fiscal year first half year. This is found at the cotton development and textile industry performance evaluation, the Ethiopian Textile Industry Development Institute (ETIDI) announced that the export of textile has reached 41.1 million USD against the nation’s plan to obtain some 60.07 million USD. Only 70 percent of the plan has been achieved.

Institute Plan and Information Management Director Abebe Kasse said that the government believes that the sector has to be export oriented by giving due emphasis to quality. The last six month export performance is 70 percent of the plan because of the several challenges faced by the sector.

Some of the major challenge in the export performance focus on local market, managerial and technical capacity of companies, power outage and fluctuation, shortage of manpower and high turnover, weak company linkage, investment project implementation delay and the like

However, it is the conviction of the Institute that there is still potential to achieve the target for the year within the coming six months.

Most of the industries established at Bole Lemi industrial park are garment producers and they are expected to commence production next month and they would become additional input to achieve the target, Abebe Kasse added.

Despite the country’s comparative advantage in cotton production, it has not managed to meet its local demand. According to the evaluation, during the production year, the planned land for cotton is 262,000 hectare but actual covered land was only 65,000 hectares. In addition, the performance evaluation shows that due to the El Nino, over 14,000 hectares of cotton plantation has been damaged and replanted with other crops. However, a total of 65,000 hectares (50,000 from Omo and 15,000 from Beles) was reversed from sugar to cotton production.

It was also noted as per the government’s aspiration to support producers to get bank loan for cotton production, 4.2 billion Birr was approved and around 3 billion was disbursed yet the loan has not been fully invested in cotton production.

It is the responsibility of the banks to lend the money after conducting feasibility study. However, [because of the practice of crop rotation], it is impossible for the producers to plant cotton every year. If the land is covered with cotton this year, it has to be covered with other crop say for instance sesame the next year. The point is, the loan was approved in the name of cotton production and there are some investors who received land but not yet commenced production.

Industry State Minister Tadesse Haile on his part said that the textile sector has been growing significantly from time to time in terms of capacity, scale, production, employment and export. But according to the plan, much remains to be done.

Besides formulating appropriate policy framework, the government has been working to produce the manpower needed to develop the textile industry and its exports. In addition, various institutions including ETIDI have also been established to provide support to the sector.

The Bahir Dar Institute of Technology has also been made to focus entirely on textile and textile related courses, the State Minister said. In addition, five universities have also launched textile programs and produce engineers for the sector. Industrial parks suitable for textile production have also been established.