The textile and apparel industry in Africa has grown very quickly in past couple of years and is likely to grow at a CAGR of 5 per cent over the next five years.
The industry can grow even faster if the countries focus on improving some of the grey areas like infrastructure, strategic supply chain and skill management.
Countries like Kenya and Ethiopia are becoming eminent garment manufacturing hubs in Africa, followed by Rwanda, Uganda and Tanzania to a great extent.
Lavish young talent, simple trade agreements, income tax breaks, cheap labour and power, friendly tax laws, strategic geographical position and the announcement of African Continental free trade area (AfCFTA) makes Africa the better destination for apparel manufacturing industry.
Tapping the global market is on the radar for several African governments and they are executing policies for helping the garment and textile industries flourish.
The easy availability of land also favours industry growth in Africa.
The African Growth and Opportunity Act (AGOA) also helps boost the industry as it allows African countries to export apparel to US in a duty-free mode.
Ethiopia has duty-free access to the US under AGOA for 10 years till 2025, and also duty-free access to EU under GSP.
India-based Raymond is one of the companies to have recently signed an MoU with the Ethiopian government to set up a garmenting facility.
Sudhir Soundalgekar, director – Projects, Raymond said, "Countries like Ethiopia are wooing global and Indian textile players by doling out sops and benefits for shifting or partially relocating manufacturing capacities in textile. This has potential of shifting value addition and job creation abroad with implications for India’s manufacturing growth and Make-in-India campaign."
Another Indian company to set up a garment unit in Ethiopia is KPR Mill Ltd, which has opened its factory in Mekelle Industrial Park under a collaborative partnership with ITC's Supporting Indian Trade and Investment for Africa (SITA) programme.