Ethiopia Inks $28 Million Deal to Develop Circular Textile Industry
Ethiopia recently signed an agreement that will infuse the African nation’s textile and garment industry with millions of dollars in funding to improve circularity and growth over the next five years.
The partnership between the country and the United Nations Industrial Development Organization (UNIDO) will bring $28 million into Ethiopia’s textile and apparel sector to fuel growth focused on promoting circularity. The project is financed in collaboration with the Global Environmental Facility (GEF), which will offer the lion’s share of funding. UNIDO will be responsible for $3 million of the funds.
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The project, which will be implemented by the Ethiopian Textile Industries Development Institute over the next five years, will focus on introducing more efficient technologies that can fuel growth and reduce waste. The program will help textile and garment producers to implement recycling programs in their facilities that will not only reduce physical waste, but also monetary waste. Enhancements to regulation and institutional capacity also will be part of the project.
UNIDO is a specialized agency of the United Nations that assists countries in economic and industrial development. Headquartered in Vienna, Austria, the agency has permanent outposts in more than 60 countries, including Ethiopia. UNIDO has had a presence in Ethiopia since 1968, implementing more than 300 projects covering a range of technical assistance interventions.
Among those projects, UNIDO has focused on providing technical support and capacity building resources to industrial development in the textile, leather and agro-processing sectors of Ethiopia. Much of that support comes through the Programme for Country Partnership in Ethiopia, which brings development partners, UN agencies and financial institutions together with Ethiopia’s business sector to f ocus on growth in those three light manufacturing sectors.
Ethiopia has a long history of cotton production, spinning and weaving. Currently, more than 230 large and medium-scale textile production factories operate in the country, along with 11,800 small-scale enterprises, according to UNIDO. In recent years, international brands such as Walmart, H&M and Jiang Lianfa Textile have invested in operations in Ethiopia, with the country’s total textile sector investment exceeding $1.2 billion over the last five years.
According to UNIDO, Ethiopia’s leather industry benefits from having one of the world’s largest livestock populations with 52 million cattle—ranking the country first in Africa and sixth in the world in cattle. The country also has large populations of sheep and goats, as well. Ethiopia produces millions of square meters of leather for footwear annually.
But both the textile and leather industries in Ethiopia have faced challenges such as outdated equipment, production and supply chain inefficiencies, and material shortages that have inhibited growth.
One of the PCP’s planned initiatives in the country is the establishment of a leather industry cluster of existing tanneries in the city of Modjo. The PCP also has plans to set up three additional footwear and leather goods clusters, while also strengthening fashion design and training capabilities of the country’s Leather Industry Development Institute.
This new influx of cash will help fund many of those projects, as well as other initiatives to bolster textile and leather production in Ethiopia. Ethiopia’s state minister of finance H.E. Semereta Sewasew said that the UNIDO agreement will provide needed continued support for the industrialization of Ethiopia.
