The historical perception of Ethiopian made products is thought to be of poor quality with inconsistent finishing. In the making of value added textiles, there exist price centric procurement and neglecting the quality first approach. This may be due to the high import tax on good quality raw materials and lack of foreign exchange. Which is, in my opinion, a contradiction by itself considering that the priority of the Growth and Transformation Plan II is the Textile and Apparel Sector.

In the recent years the industrial parks have brought about large-scale employment and Foreign Direct Investments (FDI). Nonetheless, that by itself is not sustainable if it cannot lend a hand to the up and coming local apparel manufacturers. The technology and skill transfer is a priceless leverage. We have yet to see the lags in transfer diminish. Consequently, local manufacturers are inclined to use low quality accessories and machinery to finish the products adding on to the cheap Chinese yarns and textiles; thus creating an overall poor output. If the value-addition chain cannot leap more than sketches and aesthetics, it can not flourish, merely exist.

In my experience making apparels as a local designer, under Alexander Hizikias Couture, the cosmetic touch-ups added to the products can not be procured domestically because the accessories found locally are of below standard quality. For any start-up textile producer, it is already tough to operate in view of the bureaucracy and high initial investment. Adding up to the already existing bottlenecks, the incentives and subsidies are misplaced.

The second layer of the argument lies in the uncontrolled cheap Chinese imports. The internationally boycotted action of the Chinese manufacturers over-supplying the market resulting in cheap price tags, seems to have gained ground in Ethiopia. Moreover, they are being subsidized by both the Chinese and Ethiopian governments.

The African Growth and Opportunity Act (AGOA) trade legislation has been a tax heaven to multinational companies operating in Ethiopia and exporting their products to the United States. The illusion that the incentive created by the government could bring large-scale foreign currencies has proved to be as stealthy as leaning on a garden flower. The money spent on import of textiles outweighs the export exponentially.

The profit-illusion created by the promotion of export has hypnotized policy makers into thinking it has been gaining momentum. Underlining the fact that we have a comparative advantage in this sector, even with the biggest producers of textile in the international market such as China, India, Bangladesh and Vietnam have more unit cost per output than Ethiopia. These countries have higher per capita income, better standard of work environment and social responsibility explaining the soaring costs in wage and insurance.

Import substitution remedies this situation by reducing the import of finished products, increasing duties and lessening the burden on import of raw materials, machinery and accessories for domestic manufacturers. Parallel to this, training exchange programs should be leveraged by the Ethiopian government in securing skill enhancement and technology share for the local producers.

In addition, the overvalued Ethiopian currency has been restraining international market competitiveness for businesses to break through. According to multiple reports, such as International Monitory Fund (IMF) and World Bank, Ethiopia’s Birr has been over valued against the US dollar by 10-20%. This figure has to be seen in both absolute and relative gains. In the absolute sense, the Birr has become expensive in the international market. In the latter sense, our currency reflects the under-promotion of exports. As some trade-offs have to be made, Ethiopian-made outputs consequently become expensive relative to the market competitors.

If our textile and leather sector is really more a headline than a footnote, we have to incentivize buyers by promoting our exports through currency devaluations. Those devaluations shall be based on national interest and the international money market as to maintain competitiveness in other markets.

As a solution we can subsidize local manufacturers and controlling illegally imported products. In the control of cheap imports, new policies should be formulated to protect domestic thriving industries. At any logical price point, these imports are ridiculously cheap. They are cheap for a reason too. The market would rather stabilize its price by exporting the idle goods at a very cheap price to markets with low control or ‘un-protective markets.’ Alternately, we should seek to provide a layer of coat for thriving industries such as textile and leather by applying higher duty rates and limited quotas.

While reduction on duties for accessories needed by local manufacturers could come a long way in assisting small scale manufacturers gain some headway. As small as zippers and buttons may sound, the impact of small value-addition components make the overall finished product enticing to the informed rational buyer. If these items were to be of good quality at the current duty rates, it would cost fortunes to domestic manufacturers.

As with this current state campaigning for Made-In-Ethiopia products is essential for its survival. In the same way the American consumers appreciated the Made-In-USA tags on their products. In the 1950s, the aftermath of the Second World War, the United States came to be a force of innovation and technology. Even though this phase was not confined to U.S. alone, the boom is somewhat exemplary. The state had implemented a policy of purchasing locally or domestic produces to be used in any governmental offices or organizations.Such policies strengthened the domestic car manufacturers like General Motors and Ford. The success of Apple Inc. in the 1990s can be partly attributed to this scheme.

We have just joined the third industrial revolution and are adapting accordingly. Some policies which are deemed to have been working to enhance exports initially, started by creating market from the economy with-in. Then through improved technology and finance, the companies that were subsidized became pioneers in their respective sectors.

Our nation has miles of growth ahead, and if those creating locally exist only to later be pushed out then this cannot be considered development. Africa cannot continue to be ground zero for the rest of the world to reap benefits its own people have yet to experience. We are not asking for a hand out, but opportunity to learn and develop our craft so that in the long term we can contribute to our nation’s development. It is not enough that we seek employability for the nation’s youth, it is more important we give an opportunity to build dreams, and learn skills to make vision into reality.