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Chinese, South Korean, Indian apparel makers landing in Ethiopia
(EBC; July 17, 2017)- Ethiopia's abundant labor force make it an attractive garment-sourcing destination. The average monthly pay for a factory worker is about $50, compared with $140-160 in Kenya, $70-90 in Bangladesh, $150-170 in Vietnam and $400-500 in China.
With a population hovering around 100 million, Ethiopia is the second most populous nation in Africa after Nigeria. The country's young, abundant forkforce gives it the potential to grow into a major garment-sourcing hub with a vibrant market.
Another factor in favor of the country becoming a bigger manufacturer is its fast-developing infrastructure. The inland nation used to depend heavily on trucking, hindering its transition to a more export-oriented economy. But the new railway connecting Addis Ababa to Djibouti will solve this problem.
The government has built a distribution center in the Addis Ababa suburb of Mojo, where there is also a train station on the new line. Goods from Ethiopia's industrial parks will be sent to the Port of Djibouti via the center.
Previously, it took three days to transport goods by truck from Addis Ababa to Djibouti. The railway will cut this to about nine hours.
Currently, companies targeting Ethiopia are mostly apparel makers and other light industry players. But General Electric plans to manufacture medical equipment in the country, and Samsung Electronics is working with a local partner to produce printers.
Meanwhile, Hyundai Motor reached an agreement with a local company in May regarding construction of a plant to assemble commercial vehicles.
China has also been a leading investor in Ethiopia, as in other parts of Africa. The Ethiopian prime minister attended the May international conference on China's Belt and Road Initiative in Beijing, during which he delivered a speech as the African representative.
The inclusion of Ethiopia at the conference indicates the importance China places on the country as a key regional transportation and production hub.