- A $6.5 million fund, jointly set up by the UK, Germany and Ethiopia, is expected to safeguard country’s textile and garments industry, save livelihoods and also support its economic recovery plan.
- It will provide the necessary liquidity to maintain operations and protect jobs.
As a leading provider of jobs, Ethiopia’s textile and garment industry is a critical sector contributing to economic growth. The Pandemic has hit the sector hard with a sharp fall in domestic and international demand. The sector employs 95000 people with women accounting for 70 per cent. The Jobs Creation Commission estimates job losses of 1.4 million to 2.5 million over the next three months. Already, 13 textile firms have closed their operations due to low demand and many firms are under financial stress.
A $6.5 million fund, jointly set up by the UK, Germany and Ethiopia, is expected to safeguard the country’s textile and garments industry, save livelihoods and also support its economic recovery plan from Covid-19. In short, it will provide the necessary liquidity to maintain operations and protect jobs. The fund will enable, textile factories in Ethiopia’s industrial parks to seek wage subsidies and also incentivize resilient companies that are able to adapt to Covid-19 response by developing new product lines and partnerships. Similar schemes are already functioning in many countries including the UK and Germany. The objective of the fund is to protect jobs and enable textile factories to survive the economic downturn.
To qualify for the support, businesses will have to prove the economic setbacks with a clear business recovery plan and a commitment to adhere to the International Labour Organisation core labour standards. The Commercial Bank of Ethiopia will be the odal bank to process applications and disburse funds. The UK Aid-funded FSD Africa will implement the project in partnership with First Consult, a leading Ethiopian consulting firm.
