Staritz, Cornelia

Whitfield, Lindsay

English

The apparel export industry in Ethiopia began modestly in the 2000s, but increased significantly by the mid-2010s and will continue to do so in the coming years, positioning Ethiopia to be an important supplier country in the globalized apparel industry. This paper provides an overview of the emergence and evolution of the apparel export sector in Ethiopia. It argues that the EPRDF government’s pro-active industrial policy played an important role in the development of the sector. While foreign firms are an important driver behind the growth of apparel exports, there are also locally owned firms exporting apparel, which makes Ethiopia distinct from most other Sub-Saharan African apparel exporter countries. Ethiopian-owned apparel firms exhibit diverse ownership patterns, including state-owned, party-owned, and privatesector-owned firms. The first phase of industrial policy particularly focused onincentivizing local investment in apparel production for export while later phases of industrial policy shifted the focus to attracting foreign direct investment, in order to boost exports and generate employment more quickly as well as bring knowledge and global networks into the country. Despite the focus on exports, the EPRDF government simultaneously has pursued import-substitution policies in the textile and apparel sector, which has helped the development of locally owned apparel firms by subsidizing the cost of learning to export as well as building a national supply chain from cotton to textile to apparel. The challenges for the government’s industrial policy approach is to retain the focus on local firms given their important role in productive transformation and to ensure incentives and support for local firms to export, and through this to increase their capabilities and value added, despite the existence of a protected domesticmarket.The apparel export industry in Ethiopia began modestly in the 2000s, but increased significantly by the mid-2010s and will continue to do so in the coming years, positioning Ethiopia to be an important supplier country in the globalized apparel industry. This paper provides an overview of the emergence and evolution of the apparel export sector in Ethiopia. It argues that the EPRDF government’s pro-active industrial policy played an important role in the development of the sector. While foreign firms are an important driver behind the growth of apparel exports, there are also locally owned firms exporting apparel, which makes Ethiopia distinct from most other Sub-Saharan African apparel exporter countries. Ethiopian-owned apparel firms exhibit diverse ownership patterns, including state-owned, party-owned, and privatesector-owned firms. The first phase of industrial policy particularly focused onincentivizing local investment in apparel production for export while later phases of industrial policy shifted the focus to attracting foreign direct investment, in order to boost exports and generate employment more quickly as well as bring knowledge and global networks into the country. Despite the focus on exports, the EPRDF government simultaneously has pursued import-substitution policies in the textile and apparel sector, which has helped the development of locally owned apparel firms by subsidizing the cost of learning to export as well as building a national supply chain from cotton to textile to apparel. The challenges for the government’s industrial policy approach is to retain the focus on local firms given their important role in productive transformation and to ensure incentives and support for local firms to export, and through this to increase their capabilities and value added, despite the existence of a protected domesticmarket

Roskilde Universitet

Made in Ethiopia:The Emergence and Evolution of the Ethiopian Apparel Export Sector

https://forskning.ruc.dk/files/61126066/CAE_WP3_Made_in_Ethiopia.pdf

Made in Ethiopia:The Emergence and Evolution of the Ethiopian Apparel Export Sector

Abstract

Similar works

Full text

Available Versions

Roskilde Universitet