11th November 2020
UK government still hasn’t produced a lorry drivers’ guide
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.
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.
There are widely differing explanations for the plan’s under-performance – and one extraordinarily stretching wish-list.
Silesh Lemma, Director General of Ethiopia’s Textile Industry Development Institute, reportedly claimed at a conference in Addis Ababa that “152 new investments are expected during GTP II while at least $1 bn is anticipated from the sector’s export coupled with more than 170,000 job opportunities.” He blamed ” shortage of raw materials, inefficiency, and lack of technological applications” for the failure of the GTP to move apparel and garment exports much beyond $100 mn.
In an April 14 article, the Ministry of Industry blames shortages of cotton, poor logistics and repeated power outages.
Meanwhile, Ahmed Abitew, the country’s industry minister, blamed garment manufacturers. He says they’d rather sell locally. And that, it appears, is because local cotton prices are far higher than world prices.
McKinsey published a report on April 24, suggesting a wide range of actions (ie spending) local governments and companies as well as overseas buyers need to commit to if Ethiopia (and the rest of East Africa) is to develop what the consultancy sees as the country;’s potential.
All four sets of observations indicate much more deep-rooted difficulties than Lemma’s speech implies.
His claims are hard to follow. In 2014, Ethiopia’s total apparel exports to the US, EU and Japan combined came to just 0.04% of the three major trading territories’ total imports, increasing just 3.5% year on year, and amounting to just $47 mn. Ethiopian data appears to indicate that most of its textile and clothing (T&C) exports were to Turkey’s Ayka Addis: but Turkish import data shows less than half a million dollars’ worth of apparel imports from Ethiopia in 2013 or 2014.
Ethiopia’s numbers are becoming impossible to take seriously: for the past two years, it has constantly reported foreigners’ ambitious investment plans, but still fails to show any believable result from these reports. But it has other problems.
His GTP II project calls for the T&C industry to impose a far greater transformation on Ethiopia’s economy – with far fewer benefits for its 94 million people – than the industry has managed since 2000 in Bangladesh or Cambodia. Lemma wants three million hectares of new cotton fields – in a country which till recently was known externally for its destructive famines, and in which there are now serious allegations of land-grabbing to feed his project.
He wants energy-hungry (and almost jobless) spinning and weaving mills in a country with no adequate power generation or transmission equipment. And he needs surface transport facilities in a country without them. All, he says, for just 170,000 jobs – less than a quarter the number of jobs Cambodia’s garment industry has created in the past decade.
GTP II, for the T&C industry, is indeed the fully-integrated dirt-to-shirt industry many want to see, and shares a lot with McKinsey’s prescription. But creating it means more than lots of new factories: Ethiopia’s subsistence farmers need to be coaxed off the land that barely feeds them, and someone else has to pay for their compensation and the development of a power grid to power the mills.
The mechanised cotton fields and worker-free spinning and weaving mills of the 21st century may be what consultancies and bureaucrats think Ethiopia needs. It is not clear anyone is prepared to pay for them. Or that Ethiopia’s peasants – just one drought away from another famine – or its growing army of underemployed people want it. McKinsey, of course, supports these principles.
But McKinsey isn’t paying for the power and irrigation, or for compensating evicted peasants. It doesn’t even try to evaluate how much all that’s going to cost in straightforward conventional economic terms – never mind the human cost of expropriation, the environmental cost of the desertification from more cotton cultivation – or what income these costs are going to produce.
There are worse options a country can adopt for development than Bangladesh and Cambodia have adopted. Ethiopia – cheered on by McKinsey – looks as if it has found it.