Indonesian textile industry might be facing some serious rivalry from the East African country, as Ethiopia offers lower labour and electricity costs, plus a more competitive cost structure. These factors have especially motivated the interest of China, that suffers a great deal from pollution and more expensive labour costs.

Ethiopia is currently known as an agriculture-dependent country, as it has the largest exports of coffee – measuring up to whole 16.5%, as well as other exported raw agricultural products, those being: vegetables, oily seeds, and flowers. Therefore, a change towards exporting already industrial products can help Ethiopia shift away from an economy based mainly on the primary sector.  

What is more, recent data shows that Ethiopia’s textile and apparel industry has grown on average by 51% and more than 65 international projects have been introduced for the foreign investors. In the result, 124 foreign investors have claimed to be interested and 71 of them were from China.

These financiers are greatly keen on utilizing the high-quality cotton that the country has to offer as well as duty-free access to the US and EU markets. Additionally, it has also been estimated that Ethiopia has over 3 million hectares of arable land (suitable for the growth of cotton) and that until now, only less than 10% have been utilized.

Lastly, Ethiopia is also a big contributor to the overall Nation’s GDP, being that it exports apparel and textile products to Asia, Europe, African nations and North America with total annual exports exceeding $150 million, making it the most promising textile and apparel hub for the Nation.