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Quartz Africa: Ethiopia’s humans rights problems may tank its ambition to become a global apparel center May 4, 2017

Posted by OromianEconomist in #OromoProtests, Ethiopia's Colonizing Structure and the Development Problems of People of Oromia, Afar, Ogaden, Sidama, Southern Ethiopia and the Omo Valley, Free development vs authoritarian model.
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Ethiopia’s humans rights problems may tank its ambition to become a global apparel center

BY Abdi Latif Dahir, Quartz Africa, 4 May 2017

Ethiopia wants companies that make clothes to view it as one of the world’s most hospitable places to operate. Low employee wages and cheap power have led foreign companies to gravitate towards the Horn of Africa nation in recent years. The government recognizes the strategic importance of garment and textile making, and has continued to invest in the sector by constructing large industrial parks like the Hawassa Industrial Park.

But its land and human rights problems could jeopardize that ambition, according to a new report from risk consultancy firm Verisk Maplecroft. Protests over land reform and political participation have rocked the country since 2015, leading to the reported death of hundreds of people and the detention of tens of thousands of others.

“The sector remains exposed to a host of political, social and environmental risks,” says Emma Gordon, a senior Africa analyst with Verisk. And “many of these issues are unlikely to be resolved over the coming five to ten years.”

These concerns could affect the cotton industry, and limit the opportunity to expand sustainable production. The persistence of child labor, water pollution, the exposure of workers to harmful chemicals, and the possibility of resumption of protests also pose a threat.

Ethiopia is one several east African countries—including Kenya, Uganda, and Tanzania—identified as an important center for apparel sourcing. In a 2015 survey by global management company McKinsey, Ethiopia appeared as one of the top countries worldwide where companies wanted to source their garments from in the next five years.

Retail giants such as H&M, Primark, and Tesco have sourced or established textile factories in Ethiopia to diversify from Asian markets like China and Bangladesh. The footwear industry in Ethiopia is also growing, with the Huajian Group, the Chinese manufacturer that produces Ivanka Trump’s shoe brand, talking about plans to move production to Ethiopia.

Industrial parks in Ethiopia
Industrial parks in Ethiopia (Courtesy/ Verisk Maplecroft)

These operations could be undermined by the political and social protests. The demonstrations began over plans to expand the capital Addis Ababa into neighboring towns and villages populated by members of the Oromo community—the country’s largest ethnic group. Although the Tigray-dominated government canceled the plans, protests escalated.

At the height of the protests in August and September 2016, flower farms and foreign commercial properties worth millions were burnt. The government responded by quashing the protests, shutting down the internet, and instituted a state of emergency in October that has lasted to date.

Gordon says that given that the “underlying drivers” of the protests have not been addressed, it is “highly likely that similar protests will erupt again.”

Land problems are also expected to intensify as drought ravages the country. Last week, the government announced that 7.7 million people were in need of emergency food aid. While the economy depends on agriculture, just 5% of the country’s land is irrigated, according to the United States Agency for International Development. The competition over fertile land as well as the government’s controversial plan to lease large swaths of land to foreign investors and private interests could jeopardize prospects for companies interested in doing business in Ethiopia.

“Investors are likely to become increasingly unpopular in the communities that they rely on for both their security and their workforces,” Gordon said.


Sweet labour: From H&M to Calvin Klein, brands look to Ethiopian factories where pay is as low as $21 a month and no minimum wage July 22, 2015

Posted by OromianEconomist in H & M.
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“Ethiopia’s garment sector has no minimum wage, compared with Bangladesh, where workers earn at least $67 a month, according to the International Labor Organization. Garment workers in Ethiopia started at about $21 a month as of last year, the Ethiopian government said.”

From H&M to Calvin Klein brands look to Ethiopian factories with pay as low as $21 a month

From H&M to Calvin Klein brands look to Ethiopian factories with pay as low as $21 a month

Africa is one of the few places where it is possible to go from fiber to factory in one place and Ethiopia holds the maximum promise for garment retail, being a top sourcing destination for apparel companies with $70 billion of goods procured annually.

“Africa is a huge opportunity to demonstrate how the industry can work together,” said Colin Browne, managing director of product supply and Asian sourcing for VF Corp., which owns such brands as Lee, Wrangler and Timberland.

He pointed out to the factory owners a key advantage in Africa: it is one of the few places where it’s possible to go from fiber to factory in one place.

Africa is the final frontier in the global rag trade – the last untapped continent with cheap and plentiful labor. Ethiopia’s garment sector has no minimum wage, compared with Bangladesh, where workers earn at least $67 a month, according to the International Labor Organization. Garment workers in Ethiopia started at about $21 a month as of last year, the Ethiopian government said.

Most countries in Africa benefit from a free-trade agreement with the US, an arrangement that saves retailers money and ensures that many African countries can grow their own cotton, which shortens production time.

Asia has dominated clothing manufacturing, churning out cheap clothes on inexpensive labor that are shipped to malls world-wide. But, over the past few years, rising production costs in China and several deadly factory accidents have forced apparel companies to hunt for alternatives from Myanmar to Colombia to Ethiopia.

Ethiopia was recently identified as a top sourcing destination by apparel companies, according to McKinsey & Co, which surveyed executives responsible for procuring $70 billion of goods annually – the first time an African country was mentioned alongside Bangladesh, Vietnam and Myanmar.

Whether or not Africa’s role as a supplier expands, these efforts show the lengths to which big apparel makers are willing to go to find new, low-cost sources of production. Overall, consumers have become conditioned to expect a plentiful supply of cheap clothing.

“In the global economy, light manufacturing is constantly moving,” said World Bank’s Guang Z. Chen, who was the country director for Ethiopia until last month and is now a director for several countries across southern Africa. “We see a distinct possibility of this kind of industry moving away from Asia, because labor costs are rising in China rapidly.”

Ethiopia holds the most promise for developing garment production in Africa, factory owners and brands say.

“Ethiopia seems to be the best location from a government, labor and power point of view,” says M. Raghuraman, chief executive for corporate marketing and branding at Brandix Lanka Ltd., Sri Lanka’s largest clothing exporter, which is interested in Africa’s garment potential.

At the MAA Garment & Textile Factory in Northern Ethiopia, 1,600 workers spin cotton, dye fabric and sew it into T- shirts, leggings and other basics for international retailers like Hennes & Maurtiz, AB’s H&M chain, Tesco PLC, Asda Stores Ltd’s George label, and German clothing company Kik Textilien und Non-Food GmbH.

“Investors are coming here from Sri Lanka, Bangladesh, China, India and Turkey,” said Fassil Tadesse, chief executive of MAA’s parent company, Kebire Enterprises, and president of the Ethiopian Textile and Garment Manufacturers Association.

So far, Africa barely registers in the field of garment manufacturing. And, it will take years for any other country to seriously challenge China.

Many African countries lack roads to transport finished clothing, and landlocked Ethiopia doesn’t have a port. The workforce is untrained in sewing clothes. All of sub-Saharan Africa accounts for less than 1% of global clothing exports.

Some apparel companies remain interested despite those hurdles. They are drawn to the cheap labor and to the inexpensive power, which in many countries is the second-biggest factory cost after workers. The Ethiopian government is building a railway to the port in neighboring Djibouti to help exports leave the country more quickly.

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