Ethiopia’s industrialization strategy has focused on attracting foreign direct investment. A push in recent years to attract investment led to the landlocked nation being one of the continent’s top recipients of foreign direct investment. Chinese investment in the country, which tripled in 2021 from the previous year, played a major role.

But the approach has been beset by problems in recent years, from the COVID-19 pandemic to the two year war in the northern Tigray region that ended in 2022. The US — a major destination of textile and garment exports — terminated Ethiopia’s participation in the AGOA Trade Preference Program in 2022 due to sanctions imposed after the Tigray war.

Investors say policy inconsistency on customs regulations and trade logistic issues are also major pain points for them according to Hibret Lemma, CEO of the Investor’s Association at Hawassa Industrial Park, the largest government-owned park.

“There’s a tendency to divert attention to other sectors, as ours is high maintenance,” he told Semafor Africa. “The government should focus on retaining the investors it has instead of trying to attract new ones in a tough climate.”

Other roadblocks to the success of the country’s strategy have been labor wage issues. The government’s attempt to attract textile and garment manufacturers have hit a snag because wage issues have remained a source of high turnover. Ethiopia remains one of the three countries without a set minimum wage on the continent.

MAYA’S VIEW

Made in Ethiopia has achieved a major feat in portraying the sacrifice paid by ordinary people in making the industrialization dream a reality for Ethiopia. We see Ethiopian workers who are employed yet unable to make ends meet, as well as their Chinese counterparts who have left their families behind in China to make a better life for themselves.

It shows the pains of transitions and the unseen sacrifices that sometimes don’t count toward development because of “thieves in the middle” — that’s the phrase used by a farmer who never got paid compensation for their land after they made way for park expansion.

Investment is a good opportunity for citizens, but the problems start with, “the way they’re invited in through the promise of cheap labor”, according to Deribsa Legesse, of the Confederation of Trade Unions in Ethiopia.

Negotiating with companies across the parks in the country to set up trade unions has been challenging but, after years of struggle, the process is finally gaining momentum. This is an opportunity to ease tensions. “It cultivates a culture of solving the problems through discussions,” he said.