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· The United Kingdom and Germany have set up a new fund to support Ethiopia’s textile and garment industry
· The project is in response to the COVID-19’s effect on the economy in general and textile sector in particular
· This involves an investment of US$6.5 million
The United Kingdom and Germany have set up a new fund to support Ethiopia’s textile and garment industry. The project is in response to the COVID-19’s effect on the economy in general and textile sector in particular. This involves an investment of US$6.5 million.
This fund can be used by textile factories located in Ethiopia’s industrial parks for giving subsidies and incentives to reward businesses to withstand the ill-effects of the coronavirus pandemic. This may be the beginning of a joint effort, which can expand its reach through additional support in the coming months.
The wage subsidy the scheme offers will cover a portion of total employment costs for textile factory workers those who are employed in the country’s industrial parks, thereby protecting jobs and ensuring continuity of the textile units. The funds also can be accessed by people for promoting innovation to make the textile industry ticking and forging new partnerships. The businesses to avail facilities under the scheme have to show that they were economically affected by the pandemic and should adhere to labor norms laid down by International Labor Organization (ILO).
The Commercial Bank of Ethiopia will be the nodal agency for disbursing funds to various enterprises. Textile and garment industry is a leading provider of jobs in Ethiopia’s manufacturing sector. The shrinkage of the manufacturing sector, particularly the textiles, can lead to loss between 1.4 and 2.5 million jobs. Because of the pandemic 13 textile firms had pulled the shutters so far and many firms are under financial stress.
