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Op-Ed: Ethiopia: Well-Written National Textile Policies Don’t Sell Garments

According to a new survey from consultancy McKinsey, a worldwide sample of apparel chief purchasing officers (CPOs) expects sub-Saharan Africa to increase its share of global apparel sourcing nine-fold over the next five years.

Thirteen percent of CPOs expect Ethiopia to be in the top three garment suppliers by then, the survey shows.

Is that really likely? I believe it isn’t–even if the African Growth Opportunity Act (AGOA) gets renewed–unless the Ethiopian government changes its dogmatic commitment to a philosophy there’s little evidence is realistic.

Clothesource Tradetrak shows in 2014 the region accounted for 0.7% (measured in square meters of fabric) of combined rich-country apparel imports. If those CPOs are right, the region would export about as much apparel in 2020 as Vietnam or the whole of Central America. And 50 percent more than India.

In 2010, (when Ethiopia exported about $12 million in textiles) its Growth and Transformation Plan predicted a billion dollars of textiles and garment exports during the five years to July 2015. Over the following 4.5 years, it managed to export a total of just $427 million.

It was an ambitious plan, and failure to achieve it doesn’t mean Ethiopia never will. But I worry about the difference in how buyers and Ethiopian decision-makers interpret the last five years.

The buyers’ worries cited in the McKinsey survey won’t be news to anyone sourcing in Bangladesh and Cambodia: horrifying logistics (imports and exports need to use the small, cramped and inefficient port in the neighboring country of Djibouti), unpredictable customs procedures in both countries and dreadful links with the port, unreliable power supplies, a shortage of trained staff and high labor turnover.

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Ethiopian decision-makers take a different view. Though politicians and officials agree Ethiopia needs better logistics and reliable power, Silesh Lemma, director general of Ethiopia’s Textile Industry Development Institute (TIDI) also blamed a “shortage of raw materials.” So did the Ministry of Industry, while Ahmed Abitew, the country’s industry minister, blamed garment manufacturers. He says they’d rather sell locally. And that, it appears, is because local cotton prices are higher than world prices.

TIDI’s Lemma went on to predict in April that by 2025 the country would export $1 billion annually, with “152 new investments…coupled with more than 170,000 job opportunities.”

I believe we’re hearing two different world views here.

The apparel buyers want a better place for making garments. But the Ethiopians want a quite different production model. At a time the world’s cotton warehouses are holding more unsellable cotton than almost ever before, Ethiopia wants to offer 3 million hectares (7.5 million acres) of its land (twenty-five times its current cotton-growing area) to grow cotton on. That will increase the world’s cotton acreage 10 percent. It’s not a garment industry Ethiopia’s planning–but a fully-integrated, export-oriented, “dirt to shirt” supply chain.

That seems to tick a lot of boxes. But:

It’s no longer how the industry works. Most of today’s major garment makers (like Vietnam and Bangladesh) have next to no domestic cotton supply: in India and China, the need to placate cotton growers is a major cause of garment makers’ problems.

It doesn’t create the jobs Ethiopia needs. Between the 2010 publication of its growth plan and 2025, Ethiopia’s working-age population is forecast to grow by 25 million people. The country needs a Bangladesh-scale program creating millions, not thousands, of jobs. Jobs that a program for more cotton fields and spinning mills doesn’t create. But it makes seven million acres incapable of feeding the rapidly growing number of Ethiopians.

It’s politically toxic. There are already allegations land’s being transferred to cotton growing by simple theft. Whether those claims are true or not, the land’s not then used to increase Ethiopia’s local food supply. The controversy creates a huge barrier for garment buyers, who absolutely don’t want to buy shirts every activist in the West will believe have helped starve Ethiopians.

Who’s going to pay? On paper, Ethiopia’s ample water supplies offer ample irrigation and cheap power. But someone’s got to pay for new dams, irrigation systems and power grids, all involving high capital costs—and likely to invite obstruction, both locally and in Western donors’ allocation processes.

Whatever their views about the moral and political arguments, buyers’ problem is that they can’t assume the infrastructure they want will be there when they want it.

But they can assume Ethiopia will obstruct their ability to import yarn and fabric at competitive prices: that’s why the Minister blames “raw material shortages” when almost anywhere else in the world there’s more fabric and yarn than anyone knows what to do with.

That’s not the only problem. Unlike most of Africa, Ethiopia bans the import of used clothing, which has killed the manufacture of clothes for domestic use practically everywhere between then Sahara and South Africa. So—with a likely population of 110 million by 2025—you’d imagine it would use its attractive and growing local market to encourage textile and garment investment.

Not a bit of it. Its government makes cotton more expensive than elsewhere, so recently-arrived mills and garment factories can’t compete internationally. Industry minister Abitew tries to prevent them from selling locally—and blames them if they do.

No doubt there’s a bureaucrat somewhere who sees all this as creating a well-regulated textile industry, ensuring high export earnings and creating jobs. But:

  • The policy’s not what sells clothes in Gap or H&M
  • Stopping modern factories from selling domestically is absurd
  • And at the pace Ethiopia’s creating new workers, the development plan doesn’t even scratch the surface of Ethiopia’s looming unemployment problem.

If it’s going to create a world-class garment industry, Ethiopia needs to focus on what buyers want. Not on recreating the textile industry of the 1970s.


Mike Flanagan, CEO Clothesource. Clothesource offers consultancy on the world garment industry using the wide resources of The Clothesource Knowledge Base – the most comprehensive collection of information anywhere about sourcing for the apparel industry. He can be contacted at