FSD Africa CEO on how revive Ethiopia’s textile industry hit hard by COVID-19

The COVID-19 pandemic has wreaked havoc on global industries, and one of the most affected sectors has been the textile and garment industry in Ethiopia. The collapse of domestic and international demand for garments has led to a significant decrease in capacity utilization rates, with a 30 percent decline in the first quarter of 2020 compared to the same period in 2019. Mark Napier, the CEO of FSD Africa, sat down with CNBC Africa to shed light on the strategic investments being made to revive Ethiopia's textile industry amid the ongoing pandemic. With a focus on supporting livelihoods and fostering resilience, a $6.5 million fund has been launched by FSD Africa in collaboration with the UK and German governments to provide relief to 70,000 vulnerable workers in industrial parks across Ethiopia. The aim is not only to alleviate the immediate impacts of COVID-19 on the industry but also to ensure its long-term sustainability. Napier emphasized the importance of supporting a sector that has faced steep challenges due to the global economic downturn caused by the pandemic. The resilience of the industry is crucial, especially given its competitiveness and vulnerability to external shocks. While discussing the long-term prospects, Napier highlighted the significance of infrastructure and ease of doing business in Ethiopia. Despite existing challenges, efforts are being made to ensure that factories survive the current crisis and emerge stronger in the post-pandemic era. Digital solutions have played a pivotal role in modernizing the textile and garment industry in Ethiopia. The adoption of technology and innovation has been instrumental in enhancing production efficiency and competitiveness. With half of the funding allocated towards incentivizing digital transformation, the sector is poised to leverage technology to navigate through these challenging times. The revival of the sector remains a pressing question, with the lingering uncertainty surrounding the duration of the pandemic's impact. While it is difficult to predict an exact timeline for recovery, Napier expressed optimism that a six-month intervention could help steer the industry towards stability by April or May next year. The anticipated rollout of vaccines and potential resurgence in demand offer a glimmer of hope for the sector's revival. Reflecting on the industry's growth trajectory, Napier underscored the importance of addressing key challenges to unleash its full potential. Investing in the workforce, enhancing skills development, and reducing turnover rates are critical areas that require attention. Initiatives aimed at improving workforce retention and motivation are pivotal for sustained growth and competitiveness. Despite progress made in stabilizing turnover rates, there is still room for improvement, and concerted efforts are needed to bridge existing gaps. The commitment of industry stakeholders to invest in training and skill development will be instrumental in shaping the industry's future landscape. Overall, strategic investments coupled with a focus on innovation, infrastructure development, and workforce empowerment are vital components in revitalizing Ethiopia's textile industry amidst the unprecedented challenges posed by the COVID-19 pandemic.