ETHIOPIA: Government Earmarks 1.5Bn Birr For Textile Industry

The Ethiopian Government has earmarked 1.5 billion birr for loan with some improvement in interest rates for viable exporting enterprises that work under the public-private partnership scheme. Ato Tadesse Haile, state Minister Trade and Industry said recently.

On a workshop organized by US embassy and Initiative Africa, Mrs. Aurelia Brazeal, US ambassador to Ethiopia said that the export of apparel to the United States has increased by 20 percent and imports form the US had declined.

"When AGOA expires in 2008, we want the enterprises in Ethiopia to work with local companies and rely on export to other countries. That is what we want. Producers will play a key role in the reduction of poverty," the ambassador added.

Ato Tadesse said that shortage of skill in textile and garment technology has been detected, but that immediate action plan has been put in place.

"Some six textile manufacturing training centres will be established in the Southern Nation Nationalities Peoples Region, Oromia and Tigray region," he stated.

"The government has also earmarked, 250 million birr for industrial fund to private enterprises, 8 million Euros has been budgeted to the rehabilitation of public sectors in textile and garment sectors from a grant secured from the Italian government. The acquiring of land and utilities has also been a major constraint but the Ministry of Trade and Industry has acquired some land with 2.5 megawatt power and is ready to give it to potential investors who are willing to invest in Textile and garment," Ato Tadesse said.

"Private-public partnership approach is right now the best way to solving problems. We expect the participation of the private sector, donors, chambers and NGO's.

"Since globalisation is coming at fast rate, and it will surely affect the developing countries. So it is an intelligent way for the U.S. government to find ways to help us. Ato Berhane Mewa, president of Addis Ababa Chamber of Commerce (AACC) and Ethiopian Chamber of Commerce (ECC) said.

Ato Berhane said that this was a good chance to enter the global competition in export market, but that it is not easy to do so.

"We want very much to use AGOA, but we are crippled. It is a place where customs clearance takes week and bureaucracy is beyond imagination, we need to get rid of that and we urge the government to bring down telecommunication prices and improve links to international connections. Then, we can work our way out of poverty," Ato Berhane added.

According to Ato Gizaw Molla, head of Ethiopian Export Promotion Agency, in the past 2 years, AGOA has been remarkably successful yet facing several challenges. He stated that 18 out of 36 countries are enjoying duty free status for apparel exports. These countries account for 98 percent of Africa's apparel exports to the U.S.

"U.S. imports from Africa has increased by 70 percent in 2001 and it has increased by a further 28 percent in 2002. AGOA has also created some 200,000 jobs in the apparel sector alone during the 2 years in the 18 beneficiaries," Ato Gizaw explained.

Public-Private partnership encourages the private business sector capable of shouldering bigger projects in a relatively faster way, adopt more business practices, investing in infrastructure and eliminate hidden costs like corruption and bureaucracy, according to Ato Gizaw. -Agencies.

February 14, 2003

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Added: February 14, 2003
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