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Ethiopia's Textile Industry Export Lags Behind

The Ethiopian Textile Industry Development Institute (ETIDI) noted that exports for the first six months of Ethiopian fiscal year 2015-2016 were lagging behind, achieving only 70% of the planned target, East African Business Week reported.

ETIDI further added that although the target from the sector’s export was to obtain $60.07 million, only $41.1 million was achieved. 

On mid last year, the government revealed some of its efforts to vitalize the sector by giving incentives such as duty free import of spare parts of 15% of capital goods for the first five years of operation, the possibility to hire expatriates free from income tax provided they stay for no more than 2 years and offers VAT returns for materials bought locally during the project period if declared within six months.

Mr Sileshi Lema, Director General of ETIDI, said “We are working to be a leading country in light manufacturing in Africa which will lay the foundation for heavy and high tech industries by 2025.”

More than 152 new investments were expected and at least $1 billion were anticipated from the sector’s export. 

Last week, it was revealed that although cotton was planned to be produced on 262,000 hectares of land, only 65,000 hectares of land were used for the production ; the El Nino destroyed cotton crops over 14,000 hectares of land. 

Several negative factors accounted for the week performance of the Ethiopian textile industry export within these 6 months which include lack of continuous power supply, weak company linkage, shortage of manpower, and delay in implementing investment projects 

ETIDI Planning and Information Management Director, Mr. Abebe Kasse, cited that the textile industry could attain the export target for the year in the coming six months and that the government wanted the textile sector to be export oriented while emphasizing on quality.

He further added that the sector had the advantage of high quality cotton that is grown in the country as well as duty free access to US through the African Growth and Opportunity Act (AGOA) and the EU market. There are several foreign-owned enterprises involved in the Ethiopian textile industry, coming from the United States, China, Turkey and the EU.

Source: East African Business Week