All essential ingredients for a competitive textile industry are available in Ethiopia: raw materials, low wages and low energy costs. This gives the country a comparative advantage over countries and regions elsewhere in the world. Ethiopia’s textiles and clothing industry is undergoing massive development which is helped by the presence of a cheap, skilled and highly motivated workforce. This has also been aided by the country’s impressive economic growth over the years. Ethiopia’s access to domestic, regional and international markets, in combination with the availability of raw cotton and other natural fibres, forms the basis of its enormous export potential in the field of textiles and garments. Spinning, weaving and finishing of textile fabrics are ample manufacturing opportunities for prospective investors. Textile and garment is one of the oldest industries in Ethiopia which spans over 70 years. It is still one of the driving forces in the Industrial Development Strategy. The Ethiopian Government is actively engaged in the modernisation of the textile sector with the objective of attracting foreign investors that can penetrate the global market. Ethiopia has a long tradition of producing cotton. It is cultivated in the lowlands of the country through rain-fed agriculture and in the past 40 years through modern irrigated farms. High quality cotton is also cultivated by small-scale farmers. There are about 2,575,810 hectares of land suitable for cotton production. The country provides a wide opportunity for investment in large scale farming. The production of cotton is well integrated into the textile sector, with garment factories relying heavily on domestically produced cotton. The textile and garment sub-sector has registered marked growth. Currently, the number of factories has reached about 50. The majority of these factories are privately owned with a wide participation of foreign investors. Foreign investment is contributing a great deal to this growth. In addition to the ongoing expansion and overhaul of old textile factories, privatisation of public owned factories is also expected to bring about technology transfer and productivity in the sub-sector. Currently, there are about 10 textile and apparel factories that are engaged in export. With the expansion and growth of the sub-sector it is anticipated that in the coming five years export earnings would reach to about US$1 billion. INVEST IN ETHIOPIA TEXTILES: INVESTMENT OPPORTUNITIES
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All essential ingredients for a competitive textileindustry are available in Ethiopia: raw materials, lowwages and low energy costs. This gives the country acomparative advantage over countries and regionselsewhere in the world. Ethiopia’s textiles and clothingindustry is undergoing massive development which ishelped by the presence of a cheap, skilled and highlymotivated workforce. This has also been aided by thecountry’s impressive economic growth over the years.Ethiopia’s access to domestic, regional and internationalmarkets, in combination with the availability of rawcotton and other natural fibres, forms the basis of itsenormous export potential in the field of textiles andgarments. Spinning, weaving and finishing of textilefabrics are ample manufacturing opportunities forprospective investors.
Textile and garment is one of the oldest industries inEthiopia which spans over 70 years. It is still one of thedriving forces in the Industrial Development Strategy.The Ethiopian Government is actively engaged in themodernisation of the textile sector with the objectiveof attracting foreign investors that can penetrate theglobal market. Ethiopia has a long tradition of producingcotton. It is cultivated in the lowlands of the countrythrough rain-fed agriculture and in the past 40 yearsthrough modern irrigated farms. High quality cotton isalso cultivated by small-scale farmers. There are about2,575,810 hectares of land suitable for cottonproduction. The country provides a wide opportunityfor investment in large scale farming. The production ofcotton is well integrated into the textile sector, withgarment factories relying heavily on domesticallyproduced cotton.
The textile and garment sub-sector has registeredmarked growth. Currently, the number of factories hasreached about 50. The majority of these factories areprivately owned with a wide participation of foreigninvestors. Foreign investment is contributing a greatdeal to this growth. In addition to the ongoingexpansion and overhaul of old textile factories,privatisation of public owned factories is alsoexpected to bring about technology transfer andproductivity in the sub-sector. Currently, there areabout 10 textile and apparelfactories that are engaged inexport. With the expansionand growth of the sub-sectorit is anticipated that in thecoming five years exportearnings would reach toabout US$1 billion.
INVEST IN ETHIOPIAT E X T I L E S : I N V E S T M E N T O P P O RT U N I T I E S
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Markets and market accessMajor agricultural exportproducts of Ethiopia include:coffee, livestock products(leather and leather products,live animals and meat), oilseeds and pulses, fruits,vegetables and flowers,textiles, natural gum and,spices products. Its agriculturalexport products havemarkets in neighbouringcountries, Asia, the MiddleEast, Europe and America.
Ethiopia is a member of a regional trade grouping - TheCommon Market for Eastern & SouthernAfrica/COMESA/ - a region inhabited by more than 420million people. Ethiopia also enjoys Duty Free andQuota Free (DFQF) privileges extended by, amongothers, USA – Africa Growth and Opportunity ACT(AGOA), EU – Everything But Arms (EBA), China –‘0 Tariff ’ privilege and India – DFQF. The market accessesprivileges allow investors engaged in the agriculture andagro-processing export sector of Ethiopia to reap thebenefits of the preferential markets giving them thechance to get competitive edge for their productscompared to those outside of the scheme.
Investment incentives As noted on the investment code of 2002 (as amendedin 2003) and Council of Ministers Regulation 2003(asamended in 2008) investors interested in theagriculture and agro-processing export sector will have:
• Customs duty privilege for us capital goods andconstruction of materials necessary for theinvestment and spare parts whose value is notgreater than 15% of the total value of the capitalgoods.
• Tax holiday privileges between 2 to 7 years ofwhich details will be provided by the InvestmentBoard of Ethiopia.
Investment guarantees:• The Constitution and the Investment Code protect
private property,
• Foreign investors are entitled to make the followingremittances out of Ethiopia in convertible foreigncurrency: profits and dividends accruing frominvestment; principal and interest payment onexternal loans; payments related to a technologytransfer agreement; proceeds from the sale orliquidation of an enterprise; proceeds from thetransfer of shares or of partial ownership of anenterprise to a domestic investor ; expatriateemployees may remit, in convertible foreigncurrency, unspent salaries and other paymentsaccruing from their employment in hard currency,
• Investors that suffer losses during a tax holidayperiod provided under the investment incentive arealso entitled to a loss carry forward of such lossesfor half of the income tax exemption period.
• As a member of the World Bank MultilateralInvestment Guarantee Agency (MIGA), WorldIntellectual Property Organization (WIPO), theInternational Convention on Settlement ofInvestment Disputesbetween States andNations of otherStates (ICSID) andhaving BilateralInvestment Promotionand ProtectionAgreement with theUK, investors enjoystrong guarantees fortheir investment in thecountry.
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