Ethiopia says plans for textile export to generate US$1 billion annually in GTP II

In the second phase of the growth and transformation plan (GTP II), the textile and garment industry is planned to generate 1 Billion USD in export says the national Textile Industry Development Institute (TIDI).

The current GTP, to expire on June of this year, saw textile as a leading priority in the Industrial Development Strategy. However, the sector’s performance has thus far not been in line with annual earnings from export not exceeding $100 million. The sector has also been plagued with shortage of raw materials, inefficiency, and lack of technological applications.

 
However TIDI insists that the government will ensure that the ambitious target is reached this time around. Extending attractive incentive packages to boost production of the manufacturing industry subsector is seen as one way.

 

Part of the incentive includes a 100 per cent duty free import of machineries and equipment. Additionally duty free import of spare parts of 15 per cent of capital goods for the first five years of operation, the possibility to hire expatriates free from income tax provided they stay for no more than two years, and reconciliation of VAT for materials purchased locally during the project period is possible if declared in six months, are among the incentives provided by the government.

 
In a workshop arranged to brief manufacturers on the government’s plans for the sector, TIDI’s Director General Sileshi Lemma proclaimed that more than 152 new investments are expected during GTP II, while at least $ one billion is anticipated from the sector’s export as well as 170,000 job opportunities.
Ten industrial zones to be built entirely by the government are expected to aid the realization of the plan.

 
“We are working to be a leading country in light manufacturing in Africa which will lay the foundation for heavy and high tech industries by 2025,” Sileshi said.