Textile manufacturers in the industrial parks struggle to stay the course despite Ethiopia’s delisting from the African Growth & Opportunity Act (AGOA), its primary market for apparel and textile.

Toiling to keep their workforce, and on the edge of profit-making, many are trying to redirect their products to other European markets. However, the federal government offered them an option to sell on the domestic market.

The Ministry of Revenues sent out a letter two weeks ago, extending an earlier permit to enable manufacturers to supply products to domestic markets for another six months. It was intended to support those affected by the delisting.

One hundred eighty-nine companies were housed in 10 industrial parks employing 71,000 people, a survey conducted two years ago by Cepheus Capital, a private firm, finds. They had brought 169 million dollars in export revenues, covering half of the manufactured goods exported. Nearly 90pc were exporting to the US markets benefiting from AGOA.

According to Sandokan Debebe, CEO of Industrial Parks Development Corporation (IPDC), the authorities aim to relieve manufacturers affected by President Biden’s decision to delist Ethiopia from the unilateral preferential trade regime on offer for over two decades. Ethiopia has been eligible to export duty-free items, apparel and leather being the most-rated products, under AGOA.

The African Growth & Opportunity Act (AGOA) was adopted in 2000 under the Clinton administration and intended to benefit African countries that exported to the American market. The United States bought nearly half a billion dollars worth of products from Ethiopia, mainly coffee, comprising an 11.5pc share of the 3.5 billion dollars in export revenues generated two years ago. Apparel exports brought in nearly 150 million dollars.

Erected on 2.75 hectares of land, the Indian-owned Jay Jay Textiles Plc, was one of the companies that exported these apparel products.

Housed in the Bole Lemi Industrial Park (in the outskirts of Addis Abeba’s east), Jay Jay Textile specializes in children’s clothing, mainly supplying Gerber Children’s Wear, The Children’s Place, The William Carter Company (based in the US), and the Swedish H&M. It produces 200,000 items a day. Karuprayil Purushothaman Raju, operational manager at Jay Jay Textiles Plc, saw production drop by three quarters following the AGOA delisting in December 2021, leading to lay off 10pc of 9,000 workers. Revenues have fallen by 25pc.

The offer from the Ministry to let his company sell products in the local market has little value. It has made deals with its buyers not to offer products locally. The price it may get from the domestic market would also be a fraction of the revenues generated from exports.

“We’re also not interested in selling products here,” said K. P. Raju.