Ethiopia’s economy is primarily based on agriculture, but starting in 2010, the government has been determined to diversify the exports with a priority set for strategic sectors like light manufacturing, in which textile and apparel manufacturing industries are incorporated.
Ethiopia is a Sub-Saharan country with a population of over 120 million, the second largest population in Africa. Though it is labeled as one of the poorest countries in the world, its economy is growing, trying to abate unemployment and increase production and productivity. Of the myriads of sectors and sub-sectors employed for the purpose of boosting job opportunities and production echelon, the textile and attire industry has been well utilized.
Taking the significance and the current level of the textile and apparel industry into account, The Ethiopian Herald approached Lijalem Admasu, a graduate from Bahir Dar University, to forward an opinion about the apparel and/or textile industry.
He said that Ethiopia has put in place strategies to address some of these challenges by attempting to improve employment opportunities for a growing population and diversifying its trade. The strategies have shifted the country’s focus from agricultural sector-led growth to manufacturing industry-led development.
As to him, the country is attracting the attention of companies due to the availability of cotton, easily trainable workforce, and affordable energy supply. The role of textile and apparel industries in growth and development strategies in developing countries like Ethiopia is immense but not yet well exploited. Yes, the textiles industry is important in economic and social terms, in the short run by providing incomes, jobs, especially for women, and foreign currency receipts, and in the long run by providing the country with opportunity for sustained economic development if appropriate policies and institutions are applied to enhance the dynamic effects of the textiles and apparel industry.
“Contrary to the act of making fabrics and clothing at home by individuals for personal use up until the revolution of industries, now a day, the textile industry is a global phenomenon comprised every business involved in the developing, producing, manufacturing, and distribution of textiles,” he added.
“The potential of the textile and clothing industries to contribute to long-run growth and development will depend not only on the attributes of the investors, but also on the quality and effectiveness of government policies and institutions in Ethiopia, in fact.”
“The industry is very important in terms of trade, GDP and employment and has contributed significantly in several other countries. The industry has indeed provided Ethiopia with opportunities for export diversification and expansion of manufactured exports for low-income countries that can exploit their labor cost advantages and fill emerging niches and meet buyer demands,” Lijalem added.
He further stated that there are dynamic effects of the industry and these dynamic effects are greater, the more linkages have been built up between the garment industry and local textile suppliers. At the macro level there are a number of ways in which the textile industry affects economic development as it has been a major contributor to a range of means of income.
Now, the industry has become a very complex one and it starts in agriculture with fiber production, husbandry of sheep and silkworm, mining of metals and minerals, and the fibers are processed into yarns, fabrics and apparels. This includes, spinning mills, weaving mills, knitting mills, dyeing mills, garments. In addition, companies that sell buttons, zippers, knitting supplies, sewing machines and threads, laces, looms, and drapery hardware are also related to this industry.
There are also important social aspects of the textile industry apart from the jobs provided. Without appropriate policies and institutions, developing counties often do not have the skills to enter into higher value added activities such as design and marketing, he opined.
The garment industry is now contributing a lot to the employment section. It is the main source of manufacturing employment and exports. The textile and attire industry form a major part of manufacturing production, employment and trade in many developing countries like ours. The economic and social aspects describe the importance of textiles and clothing in incomes, employment and growth and development strategies of the nation.
He said despite relatively low start-up investment costs, expansion of the sector provides a base upon which to build capital for more technologically demanding activities in other sectors. Growth of the sector allows imports of more advanced technologies to be financed through revenues gained from garment exports.
According to Lijalem, the production of textile and apparel industries has become increasingly more knowledge-intensive as investments in intangibles such as knowledge of soils and farming techniques, research and development including the production of software and the application of biotechnology, design capabilities, engineering skills, training, monitoring, marketing and management have come to play a greater role in the production of goods and services.
As to Lijalem, Ethiopia is currently in the process of changing from an agricultural led to an industrial led economy, and considering the significant role of the textiles sectors in the industrialization movement and its world potential market, Ethiopian industrial development policy has put the textile and apparel industry to the forefront to accelerate the country’s industrialization process.
The growth in the textile industries in the country is directly linked to the government’s move to set up an industrial development strategy. The Ethiopian Government has taken many steps and formulated strategies and policies to attract investment in the textile and apparel sector via numerous ways, including: ease of entry into the industry, employment opportunities due to the labor-intensive nature of the sector, export earnings from manufacturing, growth of the industrial culture, and capital accumulation for further actions.
Because of clothing and protective gear, farmers can use fertilizers, herbicides, or pesticides to increase crop yields. They can also use equipment filters and protective coverings for planting, harvesting, and protecting their crops. Without all these technical textiles, food production would be less reliable.
The textile industry has been utilized to produce bags and other means of carrying objects, balloons, kites, sails, parachutes, clothing, flags, furnishings and other home accessories, industrial and scientific uses like filtration, nets, rugs and carpets, among others, to serve the public as per their preference, he opined.
“The textile production accounts for a reasonable share of industrial production, which is a considerable contribution from the sector, indeed. Besides, a number of people directly have been benefiting from the employment it creates. It contributes a lot to the nation’s foreign exchange revenues though it is not that much exaggerated,” he underlined.
According to Lijalem, from an international market perspective, apparel exports encounter both favorable and unfavorable factors. The export pressure may not ease in the short term, but there is an expected increase in inventory demand in developed countries, faster growth in emerging markets, and rapid development of new methods like cross-border e-commerce. These developments are expected to result in a stable trend in nation’s apparel exports as prices improve, and the market structure continues to optimize.
The factors adversely contributing to the growth of the textile industry such as trade protectionism and geopolitical risk factors lead to an increase in uncertainty in the international environment, the spillover effects of conflicts and unrest, conflict, as well as the unfolding political situations in the world’s major economies.
As to Lijalem, from the point of view of the domestic market, Ethiopia’s economic stabilization and good development for the recovery of consumption create good conditions and foundations. The textile industry has to continue in Ethiopia to be the most influential contributor to the employment-generating sector in the nation by giving due emphasis to it. It would offer direct employment to a number of citizens, undeniably.
In a nutshell, the textile industry is characterized by relatively high demand for skilled labor force. However, there is a shortage of skilled textile workers, and the interest in qualification in this area is quite low despite the high unemployment in the country. The reasons for this situation are a result of the complex influence of many socioeconomic factors.
The medium- and long-term shortage of skilled labor can be offset by investing in new technology and automated machines, but due to the labor-intensive nature of this industry, the need for quality human resources is permanent, and the industry’s development depends on it. The country has to thus well capitalize on the textile/apparel/attire industry, thereby gaining the benefit it deserves out of it.
BY MENGESHA AMARE
THE ETHIOPIAN HERALD WEDNESDAY 6 NOVEMBER 2024
