A milestone fund set up between the UK and Germany in collaboration with the Ethiopian govt. to save thousands of jobs in Ethiopia’s textile and garments industry, while serving to fund the country’s economic recovery from COVID-19.
With $6.5 million funds, the corporation aims to safeguard the industry at a critical time and protect the livelihoods of workers. And the fund will more expand its reach through added support in the coming months.
The Commercial Bank of Ethiopia will be in charge of assessing applications and paying the funding to factories. Continuing the international collaboration at the heart of the fund, UK Aid-funded FSD Africa will implement the project in partnership with First Consult, a leading Ethiopian consulting firm.
Through the fund, Ethiopia’s textile factories in industrial parks can apply for wage subsidies and incentives to reward businesses that can adapt in response to COVID-19.
The textile and garment industry is a leading provider of jobs in Ethiopia’s manufacturing sector. Though, the downfall of domestic and international apparel consumption demand is expected to hit the sector hard.
According to Ethiopia’s Jobs Creation Commission, between 1.4 to 2.5 million jobs could be lost over the next three months.
“The FDRE Jobs Creation Commission estimates 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.”
Nigussu Tilahun Gebreamanuel, Commissioner of the Jobs Creation Commission of the Federal Republic of Ethiopia, said, “The FDRE Jobs Creation Commission estimates 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.”
Tilahun added, “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.”
Ethiopia’s textile and garment factories in industrial parks employed 95,000 people before. Job losses would have a substantial impact on vulnerable households of apparel workers.
International collaboration
Mark Napier, CEO of FSD Africa, said, “Our support forms part of the work FSD Africa is doing in financial markets across Africa to build resilience and help drive the economic recovery from COVID-19.”
“This fund brings together the UK and German funding and technical expertise to deliver real benefits for vulnerable households and ensure that Ethiopia’s patient efforts to build manufacturing capacity over many years are preserved,” Napier added.
