Ethiopia’s textile and garment industry, a cornerstone of the country’s industrialization ambitions, is grappling with critical policy shortcomings and an urgent demand for the introduction of a national minimum wage. Industry experts, labor advocates, and business leaders are warning that unless these issues are addressed, the sector’s growth and global competitiveness could be at risk.
A recent roundtable organized by the Forum for Social Studies (FSS) brought together stakeholders who unanimously pointed to the government’s delayed response in tackling the acute shortage of skilled labor in the sector. According to Dr. Tolera Aderie, former executive member of the Ethiopian Textile and Apparel National Association, the number of skilled workers entering the industry has dropped alarmingly in recent years. Research attributes this decline to the sector’s eroding professional prestige and a widespread tendency among employers to hire low-skilled, lower-paid workers.
This approach, experts warn, undermines efforts to build a competent workforce and threatens the sector’s sustainable growth. “Employers’ focus on cheap, unskilled labor may offer short-term savings, but it is detrimental to long-term productivity and the industry’s reputation,” said Dr. Tolera.
The absence of a statutory minimum wage has emerged as a major concern. Tesfaye Abdisa, President of the Ethiopian Textile Federation, is among those calling for immediate action. “The government’s continued delay in setting minimum wage limits is harming both workers and the sector as a whole,” Tesfaye emphasized. Factory managers in key production hubs such as Hawassa, Bole Lemi, and Kombolcha have echoed these concerns, stating that the lack of legal wage floors makes it difficult to manage their workforce and retain skilled employees.
A 2023 FSS study highlighted the detrimental effects of poor wage conditions, especially for female workers in industrial parks and small- and medium-sized enterprises (SMEs). The research, which drew on extensive interviews with government officials, factory managers, and workers, underscored the urgent need for statutory wage protections to safeguard workers’ rights and welfare.
The sector’s challenges are further compounded by high labor turnover and absenteeism rates. Studies have found annual turnover rates in some industrial parks can reach up to 100%, with absenteeism as high as 10% per month. The International Labour Organization (ILO) reports that the average monthly wage in Ethiopia’s textile and garment sector is just 3,000 birr (about $52), among the lowest globally. Nearly half of workers in foreign-owned garment factories have left their jobs due to inadequate pay, signaling widespread frustration and instability.
Despite the government’s efforts to attract investment and create jobs through the establishment of 13 specialized industrial parks, policy gaps around wages and workforce development continue to cast a shadow over the sector’s future. Outdated vocational education and training (TVET) curricula, a lack of industry-relevant skills, and insufficient investment in training centers have left the sector struggling to meet the demands of modern, technology-driven manufacturing.
The government’s ambitious goal to create 350,000 jobs in the textile industry by 2025 is at risk unless comprehensive reforms are enacted. Industry leaders and labor advocates are now urging policymakers to prioritize the establishment of a fair and enforceable minimum wage, update skills training programs, and strengthen protections for workers.
