Saturday, July 13, 2024
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Pre-owned clothes claim 53% market share in Ethiopia’s textile Industry, ETGAMA study finds

By Eyasu Zekarias

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A recent study by the Ethiopian Textile and Garment Manufacturers Association (ETGAMA) has disclosed that second-hand garments, locally known as ‘bonda’, now constitute 53% of the textile market in Ethiopia. This surge is largely attributed to the rampant illegal imports of these garments.

According to ETGAMA’s 2023 survey, the proliferation of second-hand clothing has become a significant market challenge for domestic textile producers. The survey highlighted that the appeal of bonda clothes among Ethiopians is due to their affordability and perceived higher quality, which are often sourced from well-known manufacturers in Europe and America.

These garments make their way into the Ethiopian market through various routes, including border towns such as Moyale and Dire Dawa, and surprisingly, through channels involving Ethiopian Airlines. The study noted that despite the existence of over 10,000 shops selling these garments legally, enforcement against the illegal import and sale remains lax, posing continuous hurdles for the local textile industry.

ETGAMA emphasized the economic implications of this issue, pointing out that Ethiopia is potentially losing approximately 2.5 billion birr annually in tax revenue due to these imports. The global second-hand clothing market, valued at $71.22 billion, is anticipated to quadruple by 2030, underscoring the growing scale of this challenge.

In response to the industry’s struggles, the Ethiopian government has outlined a 10-year plan aimed at bolstering the manufacturing sector. The plan includes ambitious targets to increase the share of domestic products from 30% to 60% and to enhance production capacity from 50% to 85%.

The association’s survey also shed light on various other challenges facing the textile industry, such as limited access to quality inputs, a scarcity of foreign currency, complex import-export procedures, and high logistics costs. These factors combine to create a challenging environment for local manufacturers, further exacerbated by the influx of cheap, second-hand clothing.

In a broader context, the manufacturing sector’s contribution to Ethiopia’s GDP stands at 6.8%, with exports accounting for 5.1% in 2021/22, as reported by the IMF. This compares modestly to neighboring countries like Kenya (14.2%) and Rwanda (11.1%), highlighting the need for intensified efforts to enhance Ethiopia’s industrial base.

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