According to the Ethiopian Development Institute of Textile Industry (EDITI) exports for the first six months of Ethiopian fiscal year 2015-16 are lagging behind target. EDITI said that the target was to obtain $60.07 million from textile exports, while only $41.1 million was achieved, meeting 70 per cent of the plan.

The government revealed ambitious plans to stimulate the sector by offering attractive incentives to investors in mid last year. Incentives include duty free import of spare parts of 15 per cent of capital goods for the first five years of operation, the possibility to hire expatriates free from income tax provided they stay for no more than two years.

If declared within six months, the government also offers reconciliation of VAT for materials purchased locally during the project period. More than 152 new investments were expected and least $1 billion was anticipated from the sector’s export. The GTP II is also expected to create more than 170,000 job opportunities.

Ethiopia is also building at least 10 industrial zones and all of them will be set up by the government. However, it was revealed that while cotton production was planned on 262,000 hectares of land, only 65,000 hectares was used for cotton production. The El Nino destroyed cotton crops over 14,000 hectares of land.