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Ethiopia’s textile and clothing industry is a leading provider of jobs in the country’s manufacturing sector. |
The UK and Germany have created a historic $ 6.5 million fund to save thousands of jobs in Ethiopia’s textile and clothing industry while helping support the country’s economic recovery. the Covid-19 pandemic.
Established in collaboration with the Ethiopian government of Ethiopia, textile factories in Ethiopia’s industrial parks can apply for wage subsidies, similar to licensing schemes operating in many countries, including the UK and Germany, and incentives to reward companies that can be adapted in response. to Covid-19.
Ethiopia’s textile and clothing industry is a leading provider of jobs in the country’s manufacturing sector. However, the collapse in domestic and international demand is expected to hit the sector hard. The country’s Job Creation Commission estimates that between 1.4 million and 2.5 million jobs could be executed in the next three months.
At the beginning of the pandemic, textile and garment factories in Ethiopia’s industrial parks employed 95,000 people, and women accounted for 70% of these jobs.
The fund aims to protect jobs, keep textile factories running and help factories rebuild better. Meanwhile, the incentive for innovation will reward factories that have been able to demonstrate their ability to make their businesses more resistant to Covid-19, including through the development of new production lines and partnerships.
To be eligible for support, companies must demonstrate that they have experienced an economic impact and that they have a business recovery plan. Companies will also have to commit to certain principles, such as adhering to the ILO core labor standards.
“The FDRE Job Creation Commission estimates that about 1.4 million wage employment opportunities are threatened and approximately 1.9 million people with vulnerable jobs will lose their income due to the economic impact of Covid-19,” says SE Nigussu Tilahun Gebreamanuel, Commissioner of the Employment Creation Commission of the Federal Republic of Ethiopia.
“This facility and other similar programs are crucial as they will support factories affected by the pandemic and help protect jobs in industrial parks, while slowing the harsh economic impact.”
Mark Napier, executive director of development agency FSD Africa, says the support is part of the work FSD Africa is doing in African financial markets to build resilience and help drive economic recovery from the pandemic. “This fund brings together funding and technical expertise from the UK and Germany to deliver real benefits to vulnerable households and ensure Ethiopia’s patient efforts to build manufacturing capacity are preserved for many years to come.”
The Commercial Bank of Ethiopia will be responsible for evaluating the applications and disbursing the funds to the factories. Continuing the international collaboration at the heart of the fund, FSD Africa, funded by UK Aid, will implement the project in partnership with Ethiopian consultancy First Consult.
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