The textile and apparel industry of Ethiopia has seen a growth of 51% in the last 6 to 7 years. This is very promising from the perspective of apparel sourcing organizations. The Ethiopian government has taken necessary reforms to prioritize the apparel sector. This has catered to Ethiopia sourcing activities of organizations. Easy availability of raw materials, low labor costs, minimal energy charges, and several bilateral trade agreements boosted the scenario of apparel sourcing in the Ethiopian context.
Contemporary Scenario of Apparel Sourcing in Ethiopia
According to experts, Ethiopia has the potential to become a middle-income country by 2025. The Ethiopian Government tries to make the apparel sector globally competitive. With the necessary structural transformations undertaken, it will create thousands of jobs, export industrial products and thereby, attracting foreign currency. This will also help in the reduction of poverty by a significant margin.
How Industrial Parks and Strong Infrastructure Cater to Apparel Sourcing in Ethiopia
According to the Transformation Plan 1 and 2, the Ethiopian government has planned to construct 15 export-geared, unique, and eco-friendly industrial parks. The regulatory bodies have planned to develop the park with an international standard building, superior infrastructure, and adequate safety facilities.
A plethora of exclusive operational state-run parks in the form of the Hawassa, Mekele, Bole Lemi, and Kombolcha Parks are solely focused on apparel manufacturing industries. Among all these parks, the Hawassa Industrial Manufacturing Park is the largest in Africa. The strategic sourcing companies prefer procurement operations in Ethiopia as they want to take advantage of the favorable forces. The transport system of Ethiopia has also improved considerably in the last few years. Be it railway networks or airlines, Ethiopia surpassed most other African nations when it comes to transportation facilities.
Major Reasons to Invest in Ethiopian Apparel Sector
The prime reasons why companies prefer investing in the Ethiopian apparel sector are listed as follows:
- A large amount of workforce is available at low costs, which intrigue organizations of all sorts investing in the Ethiopian apparel industry.
- While conducting procurement operations in Ethiopia, companies can align the aspects of quality and quantity. As Ethiopian workforce is well-aware of the latest technologies, they manufacture better quality products at low costs.
- Ethiopia is located at a strategic position and has easy access to international value chains.
- Another factor, which contributes to Ethiopia sourcing activities is the presence of an electric railway network. This superfast railway network connects major cities like Addis Ababa, Modjo, and Djibouti.
- The climate and soil conditions are also good in Ethiopia. These are blended with cheap hydro-energy that further flourishes procurement operations in Ethiopia.
- Ethiopia can avail the benefit of duty-free access to the European Union (EU). Ethiopia also gained access to the U.S. markets. This is possible because of the African Growth and Opportunity Act (AGOA).
- The cotton production potential of Ethiopia is greater than in most other countries.
Sourcing activities in Ethiopia can benefit companies if they conform to the right strategies. This will enable strategic sourcing companies to lower the prices of their products. If you want to gain an upper hand in the competitive arena, make your company go with Ethiopia procurement operations.
Sourcing Instinct 