Ethiopia has nearly 175 textile units, however, the country is in the throes of developing several major textile parks. Indeed, Ethiopia attracted investments of US$1.2 billion in the first six months of the current Ethiopian budget year despite being under a state of emergency. Among the investment, money poured in from ten leading Chinese companies, half which are licensed in textile and garment manufacturing industries, according to the Ethiopian Investment Commission. Investors included Jiangsu Sunshine Group, which engages in wool textiles and garments as well as a range of other sectors. The business has decided to invest close to US $1 billion in Ethiopia.
Bogale Feleke, Ethiopian Deputy Minister of Industry, stated: “We intend to increase our area of cotton production. At present, only 20 percent of the three million hectares are used for cotton production while we aim to increase to around 80 percent.”
According to the World Investment Report’s 2016 edition, Ethiopia is the second largest in attracting Foreign Direct Investment (FDI) in the textile industry sector, next to Vietnam.
Ethiopia is also looking to increase cotton production to feed its textile sector. Despite all of this, a recent report claims security, human rights issues and concerns about land-grabs will undermine the potential of Ethiopia as an apparel sourcing hotspot moving forward. The report from Verisk Maplecroft claims Ethiopia’s cotton sector, particularly, will be increasingly exposed to security and reputational risks, limiting the opportunity to expand sustainable production. “Therefore, businesses viewing Ethiopia as an opportunity to diversify their textile and cotton supply chains will need to navigate a multitude of risks across their product value chains,” said the briefing.
Emma Gordon, politics senior analyst, Africa with Verisk Maplecroft said: “Despite this, the country’s reputation as a stable destination in an unstable region has been severely undermined by protests in 2016. When Verisk Maplecroft conducted on the ground research in February 2017, we found that these issues, along with concerns over labour rights, would likely pose major risks for cotton producers over the coming five to ten years.”
