Chinese help Ethiopian shoes make giant leap

Ethiopia’s footwear industry is flourishing. One of the drivers is the US’ African Growth and Opportunity Act (AGOA), under which Ethiopia’s shoe exports jumped from $630,000 to nearly $7million between 2011 and 2012. Chinese investors are seizing their opportunity in Ethiopia, to move some of their manufacturing offshore from China to lesser-cost production sites.

Circumstances for Ethiopia's footwear industry to develop and expand are good, writes The Africa Report.  The country has long been known for producing fine-quality leather shoes and products. It has reliable power sources, offers affordable labour in a fast-growing economy with a forecasted GDP growth of over 10 per cent.

Under the AGOA, the US-Africa trade law that provides eligible African countries with duty-free and quota-free access into the US market, leather shoes export from Ethiopia has exploded. Now that tenfold increase was achieved, Chinese companies with a good perception of momentum are entering the market. Chinese companies are stepping in to empower Ethiopia's leather products manufacturing sector to keep growing.

The Huajian Group, a Chinese footwear manufacturer, opened up a factory outside the capital, Addis Ababa. The Chinese have committed to invest $2million over a 10-year period to build 'Shoe City', a global shoe-manufacturing hub in the country. This and other private-sector companies are providing a boost to the economy by creating jobs, building local capacity, and increasing funding for public services.

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