The textile industry is the largest manufacturing industry in Ethiopia. There are a number of state-owned and private textile and garment factories. The industry contributes the lion-share of employment in the manufacturing sub-sector. Ethiopia is rightly christened as the ‘Bangladesh of Africa’.

Under the Growth and Transformation Plan, “production of textile and garments” besides leather products, cement industry, metal and engineering, chemical, pharmaceuticals and agro-processing are priority areas for investment.

The Ethiopian government has asked the country's Investment Commission to guide prospective investors through every step of the way as a large domestic market and an increasing number of skilled workers are turning Ethiopia into an investment destination.

As far as textiles and clothing are concerned, spinning, weaving and finishing of textiles from the raw material to the production of garments are there for the taking for investors.

The manufacture of knitted and crocheted fabrics, carpets and sportswear are also on offer.

There has been tangible success already, with Chinese, Turkish and European garment manufacturers seeking to expand their operations.

There are also ample manufacturing opportunities for prospective investors in tannery and leather products involving fashion items such as handbags, shoes, jackets and leather garments.

The main textile products manufactured are cotton and nylon fabrics, acrylic yarn, wool and waste cotton blankets and sewing thread. The availability of inexpensive labour and the main raw material, cotton, are the major factors for considering this industrial sector as one of the strategic industries for export development.