Ethiopia's government has been giving special emphasis to its textile industry as it aims to export more than a billion dollars worth of apparel by 2016. From the economic development point of view, Ethiopian economy has just kept growing - since 2007 at times with double-digit leaps and bounds. The Economist has projected that the country will experience annual growth of 7 to 8 percent through 2016.
Many producers, in the past, have relocated production to countries that offered cheap labor, like Bangladesh or China. But in such countries, social standards have risen along with wages - while the world seems to be examining production conditions increasingly critically. So producers have started considering new options for cheap labor.
On the African continent, Morocco and Tunisia are known as clothing production countries, mostly for discount apparel. Other African countries, like Ghana or Kenya, don't play much of a role in the fashion industry, according to GermanFashion, a German industry association.
Ethiopia offers a number of advantages. Says a procurement and technical consultant with the association, "On the one hand are the lower costs - much lower than in China - with 80 million people living there and the other, it's near the sea - and quick to get to Europe via the Suez Canal”.
This could shorten delivery time by a third compared with coming from the Far East. In addition, Ethiopia's climate and that of neighboring countries is well-suited for the cultivation of cotton. As long as the cotton was of high enough quality, clothing producers could save on expensive import by using local materials.
Ethiopia is no new to textile industry. In 1939, the first factories were established during Fascist Italy's occupation of the country. During the Cold War, foreign communists collaborated with Ethiopia's then communist government in the textile sector. Some of those plants are still in service.
However, the country's production is far too small relative to global production. Of the US$17.4 billion made each year from clothing imports to Germany, Ethiopia produces just a fraction of a percent. The value of Ethiopian textile imports to Germany in 2012 was just US$29.4 million.
The other challenge that Ethiopia faces is poor infrastructure. Roads are bad and only 15 percent of the population has electricity.
