The African country is earning its position as global fashion’s future sourcing pole due to the proximity to Europe and low working costs.
Eight-hour workday, with a maximum of two extra hours per day; a day off each week and fourteen days of holidays. Ethiopia does not have a minimum wage, but garment factories salaries range from 19 to 47 euros, according to the report Ethiopia 2018, trade union approach to their textile and clothing industry, by Spanish union CCOO. Its young textile industry is highly technical but, contrarily to other countries, its labour force is not qualified. How is the country that aspires to become fashion industry’s future hub like?
Retailers like Primark, H&M and Tesco have installed offices in the country since 2012. Some time later, other groups such as PVH, Tchibo, the Turkish Ayka Textile, the Bengali company DBL, the Chinese Jiangsu Lianfa or the Indian Arvind have also become present in the territory. There are still no Spanish companies operating in the area, but CCOO wanted to produce this report ahead of a future interest to do so.
Ethiopia’s main attraction are its labour costs. According to the report, the retribution of workers goes from 19 euros to 21 euros per month. A seamstress, however, is paid an average basic salary of between 26 and 32 euros, which with extra hours can increase to 47 euros. Supervisors, technicians and administrative workers’ wages can go from 64 euros to 95 euros per month. Nevertheless, the difference is abysmal with respect to the average wages of China, whose monthly salary stands at around one thousand euros.
Labour costs are the main attraction of the country: they range from 19 euros per month for an operator to 95 euros for an intermediate position
The authors of the report also state that, as in other countries, some factories are provided with dormitories for workers and with their own transport systems. Amid the typical characteristics of their factories, the document points out its highly technical facilities and its wideness, in pursuit of having more personnel.
With the aim to reproduce the economic miracle of China, Ethiopia is underpinning its growth in the garment sector. It is estimated that there are about 300 companies with around 70,000 workers in that sector, which during the last years has grown at a rate of an annual 50%. Most of the textile and garment factories operating in the country are of foreign capital, and only a small percentage belongs to Ethiopian entrepreneurs.
According to the report’s authors, textile productivity and confection is low, and the sector’s entrepreneurs are aware that they must increase it in order to be profitable. On the other hand, there is an increase in absences and labour rotation, around 15% in both cases. Factories own advanced technologies, although their workforce is composed by young and unqualified people.
It is estimated that textile industry in Ethiopia has around 300 companies with 70,000 workers
Ethiopia does not limit with the sea, as it is located in the Horn of Africa. The country is politically stable and some weeks ago, it even marked a watershed in history naming a woman as president, who was Director-General of the United Nations in Nairobi, Sahlework Zewde. She is the only woman in Africa who occupies and has ever occupied a Head of State position.
On the other hand, it is the second most populated country in the African continent after Nigeria, with about one hundred million citizens. In the capital alone, Addis Ababa, there live 3.5 million inhabitants. As for the country’s economic development, it is one of the few that have grown the most in Africa during the last decade.
Agriculture continues to be the spearhead of its economy but in the last decade, the country has strengthened its industrial activity and, within that field, the textile one. According to the report, the economic and foreign trade policies of Ethiopia take as an example China and South Korea’s model. As a matter of fact, Chinese investment in the territory is quite high and great part of its infrastructures are built by Chinese companies.
According to CCOO, Ethiopia’s main challenges are the instability of its neighboring countries, like Somalia or Egypt; the tension between different ethnicities; high unemployment rate and the need to generate a strong industrial sector. In that sense, the trade union highlights the need to improve safety in factories as well as integrating labour rights.