Assessment of Challenges, Opportunities and Prospects of Textile Industry in Ethiopia: The Case of Yirgalem Addis Textile Factory PLC

Abstract

Over recent years, there has been an increased interest in Africa as a continent with immense resources and potentials. AGOA has been playing the major role of promoting Sub-Saharan Africa’s integration into the multilateral trading system and empowering them to have more active roles in global trade negotiations. The overall objective of the study is to assess the challenges, opportunities and prospect of Yirgalem Addis Textile Factory. This study used exploratory research design to assess the challenges, opportunities and prospects of the company and major contributing factors to them. The primarily data were collected through questionnaire and interview; and secondary data used to write background information. The findings revealed that the opportunities for the factory are assistance in capacity building, export, tax and investment. Priority is given to the textile and garment sector by the government. By using AGOA opportunities, the factory was able to improve its sales performance in the coming years. However, there are still challenges the factory faces which include inefficient production and an influx of smuggled goods to the market. The factory has a bright prospect if action is taken by the government. To benefit from the opportunities, and overcome its challenge, Yirgalem Addis Textile Factory should undertake the following measures: influence the government to revise its policy on excise tax, and control smuggling goods; making additional expansion program to increase its production capacity; Additional investment is required to modernize and further increase its production capacity; and enhance human resource capacity through training and working capital.