According to the risk consultancy firm Verisk Maplecroft, the land and human rights problems in Ethiopia could jeopardize the country’s ambition to become a global hub for business.
Ethiopia wants companies that make clothes to view it as one of the world’s most hospitable places to operate. Low employee wages and cheap power have led foreign companies to gravitate towards the Horn of Africa nation in recent years. The government recognizes the strategic importance of garment and textile making, and has continued to invest in the sector by constructing large industrial parks like the Hawassa Industrial Park.
But its land and human rights problems could jeopardize that ambition, according to a new report from risk consultancy firm Verisk Maplecroft. Protests over land reform and political participation have rocked the country since 2015, leading to the reported death of hundreds of people and the detention of tens of thousands of others.
“The sector remains exposed to a host of political, social and environmental risks,” says Emma Gordon, a senior Africa analyst with Verisk. And “many of these issues are unlikely to be resolved over the coming five to ten years.”
These concerns could affect the cotton industry, and limit the opportunity to expand sustainable production. The persistence of child labor, water pollution, the exposure of workers to harmful chemicals, and the possibility of resumption of protests also pose a threat.
Ethiopia is one several east African countries—including Kenya, Uganda, and Tanzania—identified as an important center for apparel sourcing. In a 2015 survey by global management company McKinsey, Ethiopia appeared as one of the top countries worldwide where companies wanted to source their garments from in the next five years.