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sarcasm
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18 Foreign companies exited Ethiopian Industrial Park; 24% decline in export; National Bank estimates 11.5k jobs at risk

Post by sarcasm » 29 Jun 2025, 19:45

Suspension of AGOA leads to departure of 18 foreign companies, $45 Million loss
By Eyasu Zekarias

June 29, 2025




Ethiopia has experienced significant economic setbacks following the suspension of the African Growth and Opportunity Act (AGOA) in January 2022, with approximately 18 foreign companies exiting the country and industrial parks losing an estimated $45 million in revenue, according to the African Development Bank Group’s (AfDB) Country Focus Report 2025 Ethiopia released on June 23.

AGOA had previously allowed Ethiopia duty-free access to the U.S. market for a wide range of products, fostering export growth and job creation. However, the suspension disrupted established market linkages and supply chains, leading to a 24% decline in exports from Ethiopia’s industrial parks in 2023. The Hawassa Industrial Park, one of the country’s largest, alone saw over 1,000 jobs lost due to these disruptions.

The report highlights that the suspension has compounded broader geopolitical and economic challenges, adversely affecting Ethiopia’s annual budget and threatening critical public services. Key donor countries are also scaling back aid: Germany plans to reduce its aid budget by 1 billion euros in 2025, while the UK intends to cut aid spending through 2027. Furthermore, following a U.S. government “work stoppage” on foreign aid programs, Ethiopia’s Health Ministry was forced to lay off 5,000 health workers previously supported by USAID and the CDC.

Food aid delivery has also been hampered. The AfDB report notes that 34,880 metric tons of essential food supplies—enough for 2.1 million people for one month—remain stranded at the port of Djibouti due to insufficient funds for transportation to Ethiopia.

The suspension has particularly hit Ethiopia’s textile, leather, and apparel sectors, which relied heavily on AGOA’s preferential access. The National Bank of Ethiopia reported that the suspension put approximately 11,500 jobs at risk across industrial parks, with Hawassa, Mekelle, and Bole Lemi among the hardest hit. Major investors, including PVH (parent company of Calvin Klein and Tommy Hilfiger), withdrew operations, causing supply chain disruptions and leaving many industrial park facilities idle.

Continue reading at Capital Ethiopia https://capitalethiopia.com/2025/06/29/ ... lion-loss/