Hawassa Industry Park searches alternative markets to mitigate the impact of AGOA withdrawal 

-Exports 32 million dollar worth of garment in five months

By Kaleyesus Bekele

Manufacturing companies that are operating in the HawassaIndustrial Park are looking for alternative markets to mitigate the adverse impacts of Ethiopia’s withdrawal from the US AGOA trade opportunity. 

Africa Growth and Opportunity Act (AGOA) is a trade opportunity that the US government granted Sub-Saharan-African countries to export their products free of tax and quotato the US market. The trade pact came into force in 2000. It is to be recalled that the US government suspended Ethiopia from the pact in connection with the conflict in Northern Ethiopia. Ethiopia annually generates more than 250 million dollars by exporting products to the US market through the AGOA trade opportunity. 

CEO of the Industrial Park Development Corporation (IPDC) Aklilu Tadesse, deputy CEO Shiferaw Solomon and other senior officials of the corporation visited the Hawassa Industry Park this week which used to export 85 percent of its products to the US market. The Hawassa Industrial Park is the largest industrial park in Ethiopia dozens of international garment manufacturing firms are operating. 

During the visit Aklilu said that companies working in the Hawassa Industrial Park are accessing new markets in Europe to mitigate the impact of the AGOA withdrawal. “The companies are resilient. They managed to mitigate the impact of the AGOA sanction by exporting to European countries,” Aklilu said. “IDPC will provide the required assistance,” he added. 

There are 52 manufacturing shades in the Hawassa IndustrialPark. Currently, 24 manufacturing companies are operating in the park. More than 29,000 young Ethiopians mostly women are employed by these companies. Most of the young people who come from the rural areas are trained and employed by the international textile and garment firms. The young men and women back their families back home. Unfortunately, thousands have been laid off in the wake of Ethiopia’s withdrawal from AGOA. 

Aklilu said IDPC is assisting the manufacturing firms in accessing new markets in Europe and Africa. “We will organize a visit to the Ambassadors of Nigeria and South Africa soon,” he told Origins Business.

Ethiopian Prime Minister Abiy Ahmed who is participating in the US-Africa Summit in Washington DC is expected to deliberate with US officials on the possibility that Ethiopia could rejoin the trade pact. 

As the Ethiopian government and TPLF have signed a peace accord that brought the two year war in Northern part of Ethiopia to an end the US government is expected to reconsider to lift the sanction. Since the Federal government and TPLF have begun implementing the peace deal, the US government may consider reinstating Ethiopia’s eligibility.  “I personally believe that the AGOA saga will change,” Aklilu said. 

However, he said Ethiopia should not be dependent on a single market. “We are working to access new markets,” he told Origins Business. 

Meanwhile the manufacturing firms in the Hawassa Industrial Park have exported 32 million dollar worth of garment and textile in the last five months. 

Matheos Ashenafi, general manager of the Hawassa Industrial Park, disclosed that the companies exported their products to European countries. “The companies are exporting their products to European markets and some African countries. There are also some companies that are still exporting their products to the US market,” Matheos said.  

The Ethiopian government has allowed the international manufacturing companies to sell their products in the local market. According to Matheos, the manufacturing firms have generated 1.5 million dollars from the local market in the last five months.   

The management of IPDC led by Aklilu Tadesse held a consultative meeting with representatives of the manufacturing firms at the Hawassa Industrial Park on Wednesday December 14, 2022. “We are committed to resolve the challenges that the companies are facing and we would like to improve our service,” Aklilu said.

JP Textile Technologies, Silver Spark and Everest are some of the giant garment factories operating in the Hawassa Industrial Park. Matheos said PVH is the only manufacturing firm that relinquished the park in the wake of AGOA withdrawal.