There have been concerns the state of emergency would damage Ethiopias duty-free status on exports to the US under the African Growth and Opportunity Act (AGOA)

There have been concerns the state of emergency would damage Ethiopia's duty-free status on exports to the US under the African Growth and Opportunity Act (AGOA)

The Ethiopian government has lifted a 10-month-long national state of emergency imposed last October – in a move that will be welcomed by the many textile and apparel firms investing in and sourcing from the country.

The state of emergency was imposed in response to widespread unrest by members of the Oromo and Amhara ethnic groups, who have accused the Ethiopian People's Revolutionary Democratic Front government of suppressing their political and economic rights.

An advisory from the US Department of State last year specifically warned against visiting the Amhara and Oromia regions – the latter being where almost all the new textile and apparel manufacturing development is concentrated.

While some restrictions were eased in March, a further four-month extension was also put in place at the same time – which was lifted on Friday (4 August).

According to the Ethiopian Investment Commission, the state of emergency has not deterred foreign investors, with half of the US$1.2bn worth of projects committed in the first six months of the 2016/17 fiscal year licensed in textile and garment manufacturing.

And the US$250m Hawassa Industrial Park, the largest industrial park in Africa, was inaugurated in 2016, is fully occupied, and saw its first exports leave the facility earlier this year.

How Ethiopia's flagship textile and apparel park is taking shape

In an exclusive interview with just-style, Dr Arkebe Oqubay, a minister and special advisor to Prime Minister Hailemariam Desalegn, revealed that Ethiopia is targeting garment and textile exports worth $30bn by 2025 – a huge goal for a country whose annual shipments currently sit at just $115m.

Ethiopia sets its sights on $30bn apparel exports

But there have undoubtedly been concerns the state of emergency would damage Ethiopia's duty-free status on exports to the US under the African Growth and Opportunity Act (AGOA).

And according to information shared with just-style, Ethiopia was informally put on terms by the US government with regards to its AGOA eligibility during the last days of the Obama administration.

Documents on the Foreign Agents Registration Act (FARA) database also show the country in January hired government relations and lobbying firm SGR LLC to lobby on behalf of the Ethiopian government with US policy makers, Congress, the media and business leaders. Its role may also have been to potentially help prevent Ethiopia's expulsion from AGOA.

While Ethiopian officials have not confirmed either of these developments with just-style, Dr Arkebe in April said the civil discontent was "linked with the challenges we have in fulfilling the aspiration of the youth: they want economic empowerment, they want decent jobs. Every year we have 100,000 university graduates; we have close to 1m graduates from technical schools and high schools every year...we need to create jobs."

He also suggested the country's multinational federal system, under which 80 ethnic groups with 80 different languages (35 of which are used for primary school education) are decentralised into nine states, each with its own constitution, executive government, and legislature, "is a big challenge."

"The reason the government put in place the state of emergency is not because the situation was out of control, but with the constitution we have the government cannot arrest people without an order from the court." The state of emergency gave security forces the power to arrest people.

Dispute over land ownership

The protests that sparked the state of emergency led to hundreds of deaths and thousands of arrests, as well as extensive damage to foreign farming and manufacturing projects sparked by a dispute over land ownership. The violence also included an attack on the Saygin Dima textile mill in Sabeta, around 35 km from the capital Addis Ababa.

Even though the state of emergency is no longer in place, the underlying causes have not been resolved – meaning there is a strong likelihood that similar protests will erupt again.

Ethiopia's vision is to create a fully integrated vertical supply chain from the ground up, from garment factories to fabric mills, accessories producers, spinning mills and all the way back to high quality cotton plantation.

But cotton production, in particular, is seen as particularly vulnerable to future land rights disputes.

However, Dr Belachew Fikre, deputy commissioner of the Ethiopian Investment Commission, tells just-style the Ethiopian Textile Industries Development Institute, the Ethiopian Cotton Growers, Ginners and Exporters Association, as well as the recently reconstituted Authority on Horticulture and Agricultural Investment, are three pillar institutions working together to ensure cotton is grown in the most socially and environmentally sustainable way.

"The land that we have prepared for the cotton plantation is to be used with almost zero displacement and shouldn't be looked at as posing a potential for 'land grab', he explains.

Dr Arkebe also points out that the Ethiopian government has prepared extensive land for cotton cultivation and is already working with companies interested in producing high-quality medium and long staple cotton – as well as apparel partners such as PVH and Arvind.

"The most suitable land for this purpose is located near Diredawa ((300 km from the port of Djibouti) and we have made preparations to make 1 million hectares of land available. Some interested investors have been requesting up to 1/2 million ha of land."

As many of the new large mills are also located in Diredawa, the plan is to import cotton and expand yarn production until sufficient locally-grow fibre is available.

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