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Low Wages Draw Int’l Textile Firms to Ethiopia
World Economy

Low Wages Draw Int’l Textile Firms to Ethiopia

Low wages, cheap power and a stable political situation have prompted foreign textile companies like H&M to start sourcing from Ethiopia. The country has a huge workforce and would like to become the next international textile hub. But the workers themselves are struggling to make ends meet, DW reports.
Sewing machines rattle away in the huge GG Super Garment factory in Debre Zeyit, some 45 kilometers southeast of the Ethiopian capital, Addis Ababa. Hundreds of women and a few men are sewing singlets and T-shirts, destined for the Swedish company H&M.
As a result of rising salaries and growing labor unrest in Asia, an increasing number of foreign companies have started moving their production to Ethiopia. According to factory manager Joseph Elisso, the conditions in the East African country are far more favorable.
“Ethiopia is stable and peaceful, electrical power is cheap and labor costs are very low,” he explains.
Entry-level salaries for workers in Ethiopia’s textile industry range from $35 to $40 per month–lower than Bangladesh’s minimum wage of $68 per month and far below the average wage of $500 in the Chinese textile sector. Ethiopia doesn’t have a minimum wage, and due to high unemployment, workers are often forced to accept whatever wage they are offered.

 Not Enough to Live
Although Ethiopian workers are generally happy that increasing foreign investment is bringing jobs, many are battling to make ends meet. “I only get 850 Ethiopian birr (about $48.7) per month and struggle to cover all my expenses,” Tigist Teshome says. The 23-year-old factory worker, dressed in a checkered pinafore, is living with friends to share the costs. “I would like to live on my own, but rent alone is already 600 birr. How will I manage to pay food and clothing?” she asks.
In Duken, about a half hour drive from the Debre Zeyit garment plant, there’s a big shoe factory run by Chinese company Huajian. Around 3,800 Ethiopian men and women are busy hammering soles on shoes, sewing pieces of leather together, operating machines and checking the final products.
The company plans to produce 2 million pairs of shoes this year, mostly for American and European customers like Guess, Naturalizer and Toms. Ethiopia has one of the largest heads of cattle in Africa and leather is widely available in the country. The company is planning to expand production, boosting the number of workers to 50,000 in 10 years.
Although Huajian has created many news jobs, the company’s employees complain their wages are too low .
Manager Song, however, says the low pay reflects the low productivity and quality of work. “The workers’ lack of skill has impacted quality. Many shoes were rejected by our customers and we had to pay €4.5 million ($4.95 million) as compensation in the first two years,” Song states.

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