Supporting Ethiopia’s pathway towards stable long-term industrialisation
Sustainable Industrial Clusters (S.I.C.) / Environmental and Social Standards in the Textile and Garment Industry in Ethiopia
German Federal Ministry for Economic Cooperation and Development (BMZ)
2021 to 2024
Foreign, Commonwealth and Development Office (FCDO) of the United Kingdom
Products and expertise
Economic development and employment
Ethiopia has a population of more than 120 million of which the majority is young. At the same time, the urban unemployment rate is more than 30 per cent (pre-COVID-19). Therefore, the government prioritises sectors like manufacturing that can create jobs on a large scale. The light manufacturing sector including the textile and garment industry accounts for a large part of the country’s manufacturing exports. It continues to be labour intensive, employing up to six times more people (the vast majority women) than other manufacturing sectors.
While the manufacturing sector attracted 50 per cent of Ethiopia’s total foreign direct investment (FDI) in 2019, investment alone does not guarantee long-term job creation and economic growth. Besides Ethiopia’s challenging political context, it also faces a lack of financing, sector-specific technical skills and strategic coordination among actors as well as inadequate compliance standards and industrial work culture. As this hinders stable industrial growth, measures are needed to make the sector more competitive and stable in the global market.
Ethiopia’s manufacturing sector, with a focus on textile, garment and leather industry, is creating decent jobs and moving towards more stable economic growth.
The project promotes long-term stable industrialisation by:
- Improving working and living conditions for the mainly female factory workers in the selected industrial parks by preventing gender-based violence and harassment at work, as well as setting up social dialogue platforms like workers’ cafés and grievance mechanisms.
- Making industrial parks more climate sensitive with a relevant regulatory framework, mobilisation of investments and technical assistance to set up ecological industrial parks.
- Improving social and environmental regulations and enabling compliance and government enforcement of them.
- Enabling locally based businesses to supply to industrial parks and buyers/fashion brands abroad.
Last update: July 2023