Transforming Ethiopia’s manufacturing economy through environmental and social improvements

Context

Ethiopia’s textile and garment industry has been a significant export and employment driver in the country’s manufacturing economy. However, this industry has been plagued by supply chain disruptions, a fragile security situation and high production costs. The suspension of the African Growth and Opportunity Act (AGOA), which provided preferential access to the United States’ market, has significantly reduced exports, highlighting the need for market diversification.

Social and environmental issues, including low wages, gender-based violence, and inadequate waste management, also affect competitiveness in the European Union (EU) market. Addressing these challenges is essential for the industry’s resilience.

Objective

Ethiopia’s textile and garment industry meets international market standards, enhances workers’ welfare, and successfully identifies and connects with diversified markets through demand-driven linkages, ensuring environmentally responsible practices.

Approach

The project enhances the resilience of the textile and garment industry by:

• Improving worker welfare by scaling up successful approaches to enhance the living and working conditions of female workers, increasing their economic participation;
• Advising manufacturers and industrial parks on adopting global best practices and certifications to address international market requirements;
• Expanding market access by enhancing manufacturers’ ability to tap into new markets, particularly in the United Kingdom, the EU, and African markets;
• Addressing policy barriers through public private dialogue and evidence-based analyses to create a more conducive business environment.

Last update: March 2025