Over 6 Million USD Fund launched to Protect Textile Industry Jobs in Ethiopia

Addis Ababa October 30/2020 (ENA) A 6.5-million-US dollars fund that helps to protect textile industry jobs in Ethiopia was launched yesterday, the British national Afro-Caribbean weekly newspaper The Voice reported. 

The fund set up between the UK and Germany, in collaboration with the Government of Ethiopia, could save thousands of jobs in Ethiopia’s textile and garments industry, while helping to support the country’s economic recovery from COVID-19.

With USD 6.5 million invested at launch, the partnership aims to help safeguard a critical industry and protect the livelihoods of those working within it, the newspaper stated.

Through the fund, textile factories in Ethiopia’s industrial parks can apply for wage subsidies – similar to the furlough schemes operating in many countries, including the UK and Germany – and incentives to reward businesses that are able to adapt in response to COVID-19.

The funding will kicks start the facility and the partnership may further expand its reach through additional support in the coming months, it was reported.

According to the newspaper, Ethiopia’s textile and garment industry is a leading provider of jobs in the country’s manufacturing sector. However, the collapse of domestic and international demand is expected to hit the sector hard. Ethiopia’s Jobs Creation Commission estimates that between1.4 to 2.5 million jobs could go over the next three months.

Attending the fund launching, Ethiopia's Jobs Creation Commissioner Negussu Tilahun  said " this facility and other similar programs are crucial as they will support the factories being affected by the pandemic and help protect jobs."

He estimated that close to 1.4 million wage employment opportunities are under threat and approximately 1.9 million people in vulnerable employment will lose their income due to the economic shock of COVID-19. " This facility and other similar programs are crucial as they will support the factories being affected by the pandemic and help protect jobs in industrial parks, while slowing down the harsh economic impact."

"At the start of the pandemic, " the commissioner added that "textile and garment factories in Ethiopia’s industrial parks employed 95,000 people, with women accounting for 70 percent of these jobs. Job losses would have a significant impact on vulnerable households.''

The fund brings together UK and German funding and technical expertise to deliver real benefits for vulnerable households.

Already, 13 textile firms have stopped operating due to low demand and with many firms under financial stress, the landmark fund will provide them with liquidity to maintain operations while protecting jobs.

Ethiopian News Agency