Bolstering Chinese investment in Ethiopia’s textile sector (en)

17 septembre 2018
ITC Nouvelles
ITC’s Partnership for Investment and Growth in Africa connects Chinese investors to Ethiopian industry

Major Chinese textile companies are stepping up sourcing and investment plans in Ethiopia following a visit to the African country by a delegation of industry representatives organized by the International Trade Centre.

During their 26-28 August visit to Addis Ababa, eleven delegates from the China Chamber of Commerce for Textiles (CCCT) met with heads of local textile companies and leaders of Ethiopian Textile and Garment Industry Association as well as with high-level government officials. They struck sourcing agreements and explored investment partnerships with Ethiopia-based partners.

The visit was part of ITC’s Partnership for Investment and Growth in Africa (PIGA) project, and was one in a sequence of events aimed at boosting private investment from China in African economies.

The CCCT has a membership comprising over 12,000 textile companies in China. Its recent delegation to Ethiopia included the heads of four large-scale firms, who were excited about the prospects for more Chinese investment in Ethiopia, particularly as manufacturing costs rise in China.

One of the firms on the delegation, agreed to source 1.5 million pieces of beach shorts from a textile factory located in the Bole Lemi Industrial Park, a specialized export zone on the outskirts of the Ethiopian capital.

A B2B event organized by the PIGA team for the delegation and local manufacturers generated six prospective investment partnerships for three local companies with values ranging between $1 million and $5 million.

Over the last twenty years, China has become an increasingly important source of financing in African economies, including in Ethiopia’s young but fast-growing manufacturing sector. The Chinese delegates were impressed by Ethiopia’s progress on improving infrastructure, including roads, trains, and electricity, though they suggested that further enhancing labour productivity and lowering logistics costs would make the country an even more attractive destination for investment. The current trade tensions between the United States and Beijing were cited as an additional incentive for Chinese firms to invest in Ethiopia, with increasing difficulties associated with exporting from China.

The PIGA project in Ethiopia looks forward to continuing cooperation with the CCCT in order to catalyse further investment in the future.