Foreign investment in Ethiopia declines in 2016. So Ethiopians recycle old textile investment stories
Foreign investment in Ethiopia looks likely to undershoot its target for 2016, after falling sharply in the second half of the year.
US apparel imports (in square metres) grew 3.4% in December 2016 over December 2015, though falls in the previous six months a 2016 annual fall of 1.1%.
China’s CGCOC Group to construct Bole Lemi II Industrial Park at a cost of $143 mn in the south of Addis Ababa. China’s CCCC to a second industrial park in the Oromia Regional State in Jimma,for $61mn
Israel’s Bagir announced their Ethiopian plant’s first completed foreign order, a trouser programme for US H&M stores.
The partial destruction by rioters last week of the Saygin Dima mill in Ethiopia perfectly illustrates the short-term superficiality of too many ‘visionary’ sourcing strategies.
China’s Jiangsu Sunshine announced during early April a $350 mn investment in a new plant in Ethiopia’s Adama industrial park.
US apparel imports in September, measured in square metres of apparel, grew 4.8%, bringing growth in the moving annual total (MAT) to September to 6.1%. As in most Septembers, China’s share was around 50%.
The US dollar value of Chinese apparel exports continued to fall in June. But, with exports to the UK and US remaining healthy, the fall seems mostly the result of the collapsing euro and yen.
In my Sourcing Journal article on Ethiopia, I question the wisdom of elaborate “dirt to shirt” national garment and textile strategies.
A Mc Kinsey survey forecasts a range of apparel-exporting possibilities for East Africa by 2025 between around $0.5 bn and $3 bn. It puts today’s apparel exports by Ethiopia, Kenya, Tanzania and Uganda combined at around $300 mn.
Ahmed Abitew, Ethiopia’s industry minister, blamed garment and textile makers in April for the underperformance of the country’s garment export programme.
The key manager behind Ethiopia’s project to export $1 bn in textiles by 2016 effectively admitted in public on April 8 that the timetable has been abandoned. He now forecasts the target will be achieved by 2025, in a second phase of the country’s Growth and Transformation Plan, now being called GTP II.
Ethiopia has admitted its plans for apparel and textile exports have been unrealistic. Its revised project may be achievable – but the real costs to the Ethiopian people still seem unacknowledged, and buyers’ requirements may be well beyond the country’s ability to offer.
Shaoxing Mina Textile Company announced on March 4 it would spend $15 mn developing a “textile and garment” plant at Sebeta in Ethiopia’s Oromia State.