Inception Phase Report

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION

INCEPTION PHASE REPORT

CAPACITY-BUILDING AND JOB CREATION FOR YOUTH AND WOMEN IN THE TEXTILE SECTOR IN MIGRATION PRONE AREAS OF ETHIOPIA

Davide Chinigò, international consultant [email protected]

Table of Contents

List of acronyms ...... 5 List of tables ...... 7 List of maps ...... 7 Executive summary ...... 8

1. Introduction ...... 20

1.1. Project objectives ...... 21 1.2. Project background and rationale ...... 21 1.3. Methodology ...... 25 1.3.1. Identification of priority sectors and areas of intervention ...... 25 1.3.2. Private Public Partnership (PPP) approach ...... 27 1.3.3. Methods of data collection and analysis for the socio-economic assessment ...... 29 1.4. Project priority areas ...... 30 1.5. Project priority sector targets ...... 33 1.5. Project beneficiaries ...... 35 2. The Textile and Garment Industry in Ethiopia ...... 38

2.1. The T&G industry and employment creation in Ethiopia ...... 41 2.2. The T&G and exports in Ethiopia ...... 44 2.3. Gap analysis of the T&G industry in Ethiopia ...... 49 2.3.1. Gaps in technical and soft skills ...... 49 2.3.2. Gaps in creating an enabling environment ...... 52 3. The Textile and Garment Industry in Tigray ...... 57

3.1. The Manufacturing Industry in Tigray ...... 58 3.2. The Textile & Garment Industry in Tigray ...... 59 3.3. The Mekelle Industrial Park (MIP) ...... 61 3.3.1. Challenges facing Industrial Parks ...... 62 3.4. Socio-economic statistics ...... 64 3.4.1. Tigray Regional State statistics ...... 66 3.4.2. Mekelle Municipality statistics ...... 69 3.4.3. Socio-economic assessment of six wereda surrounding Mekelle municipality ...... 72 3.4.3.1. Degua Temben ...... 73 3.4.3.2. Hintallo Wajirat ...... 77 3.4.3.3. Enderta ...... 80 3.4.3.4. Saharti Samre ...... 82 3.4.3.5. Wukro Town ...... 86 3.4.3.6. Kilte Awellalo ...... 89

3.5. In-depth interviews with workers and trainees ...... 92 3.5.1. Thematic analysis ...... 92 3.5.2. Women empowerment and gender dynamics in the textile industry ...... 97 4. Project Action Plan ...... 101

4.1. Site selection for the Centre of Excellence ...... 103 4.1.1. Mekelle Garment College Profile ...... 103 4.1.2. The college current capacity ...... 104 4.3.3. Information about machineries ...... 105 4.1.4. Master plan of the available workshops...... 107 4.2. First Public-Private Roundtable discussion ...... 109 4.3. Second Public-Private Roundtable discussion ...... 111 4.3.1. Technical skills for basic operators ...... 113 4.3.2. Technical skills for middle management ...... 115 4.3.3. Training for managers ...... 117 4.3.4. Soft skills training ...... 119 4.4. Profile of the stakeholders engaged to establish the Centre of Excellence ...... 123 4.4.1. ETIDI ...... 124 4.4.2. H&M ...... 125 4.4.3. DBL ...... 126 4.4.4. Strathmore ...... 129 4.4.5. Velocity ...... 130 4.4.6. MAA garment ...... 131 4.4.7. Ethiopian Institute of Science and Technology ...... 133 4.4.8. Local Government Offices ...... 133 4.4.9. Coordination with Development Stakeholders ...... 134 4.4.9.1. Towards a collaboration with GIZ ...... 135 4.5. Recommendations to formulating a one-year training timeline ...... 137 4.5.1. Key findings ...... 137 4.5.2. Recommendations on Coordination and a PPPs ...... 138 4.5.3. Technical skill trainings ...... 140 4.5.4. Soft skill trainings ...... 143 4.5.4.1. Non-conventional soft skill training activities ...... 144 4.6. Preliminary list of equipment and machineries for the Centre of Excellence ...... 145 4.7. Project Logical Framework...... 149 5. References ...... 150

Annex 1. In-depth interviews transcripts ...... 152 Annex 2. Training Manual on Technical Skills for Basic Operators ...... 169 Annex 3. Training Manual on Middle Management ...... 169 Annex 4. Training Manual for Managers ...... 169 Annex 5. Training Manual on Soft Skills...... 169

List of acronyms

AGOA: African Growth and Opportunity Act AICS: Italian Agency for Development Cooperation BOLSA: Bureau of Labour and Social Affairs Bureau T&I: Bureau of Trade, Industry and Urban Development CAMM: Common Agenda on Migration and Mobility COMESA: Common Market for Eastern and Southern Africa CSA: Central Statistical Agency DFID: UK Department for International Development DGCS: Direzione Generale per la Cooperazione allo Sviluppo EAC: East African Community EBA: Everything But Arms EIT: Ethiopian Institute of Technology EP: Enterprise Partners ETIDI: Ethiopian Textile Industry Development Institute ETGAMA: Ethiopia Textile and Garment Manufacturer's Association EU: European Union EUR: euros FDI: Foreign Direct Investments GIZ: German Federal Ministry for Economic Cooperation and Development GoE: Government of Ethiopia GTP I: Growth and Transformation Plan GTP II: Growth and Transformation Plan II IDP: Internally Displaced Persons IDZ: Industrial Development Zones ILO: International Labour Organization IP: Industrial Park IPDC: Mekelle Industrial Park Development Corporation ITC: International Trade Centre JICA: Japanese Development Cooperation MAECI: Ministero degli Affari Esteri e della Cooperazione Internazionale MGC: Mekelle Garment College MoI: Ethiopian Ministry of Industry 5

MSE: Micro and Small Scale Enterprises NGO: Non-Governmental Organisations OS: Occupational Standard PCP: Programme for Country Partnership PPP: Public Private Partnership RMG: Ready Made Garment SADC: South African Development Community SINCE: Stemming Irregular Migration in Northern & Central Ethiopia SMMIDA: Small and Medium Enterprise Development Agency SNNPR: Southern Nations, Nationalities and People's Regions T&G: Textile and Garment TOT: Training of Trainers TVET: Technical and Vocational Training UNIDO: United Nations Industrial Development Organization UNOCHA: United Nations Office for the Coordination of Humanitarian Affairs USD: US dollars VIS: Volontariato Internazionale per lo Sviluppo

List of tables

Table 1. Employees in the T&G sector, 2013-2016, Central Statistical Agency Table 2. Ratio of cost of labour to gross value of production by industrial group - public and private Table 3. Wage rate distribution in garment Table 4. T&G export in Ethiopia, 2001-2014, US$ thousands, ITC (2016) Table 5. Destination of garment export in Ethiopia Table 6. Cost of energy in Ethiopia Table 7. Unemployment figures in Tigray disaggregated by education level and Zone administration (2016-17) Table 8. Provisional Unemployment figures for 2017-18 Table 9. Trainings for prospective workers in the Mekelle Industrial Park (MIP) Table 10. Unemployment figures in Mekelle Municipality disaggregated by education level and Sub City (2016-17) Table 11. Trainees from Mekelle Municipality to be employed in Mekelle Industrial Park (Until October 2017) Table 12. Mekelle Returnees from the Kingdom of Saudi Arabia

List of maps

Map 1. Tigray National Regional State Map 2. Wereda targeted by socio-economic assessment around Mekelle

Executive summary

The UNIDO project “Capacity-building and job creation for youth and women in the textile sector in migration prone areas of Ethiopia” is funded by the Italian Agency for Development Cooperation (AICS) in Ethiopia. The project is implemented over three years starting from September 2017, has a total budget of 2.5 million EUR, and is run in close coordination with the Ethiopian Ministry of Industry (MoI).

As a follow up to the assessment conducted for the Stemming Irregular Migration in Northern & Central Ethiopia (SINCE) project inception phase, the present project has been developed to tackle one of the main roots behind irregular migration and displacement, i.e. youth unemployment and, more broadly, lagging economic opportunities. The project aims to support the Government of the FDR of Ethiopia (GoE) in creating decent and productive job opportunities for young women and men through the strategic development of the Textile and Garment (T&G) sector. Expanding the T&G sector is done by supporting capacity-building initiatives in the textile industry through a Public Private Partnership (PPP) approach.

The project responds to a specific official request from the Ethiopian MoI to support the sector and is articulated in line with the Valletta Action Plan under the chapter development benefits of migration, which addresses the root causes of irregular migration and forced displacement. Intervention focuses on Tigray National Regional States, which is a region where the T&G industry is in rapid expansion, and where significant fluxes of origin and transit of migrants currently takes place. The project targets two priority areas. The first is the creation of employment opportunities and revenue-generating activities through strengthening the professional and soft skills of young people, with a particular focus on women, as well as broader institutional capacities in Tigray. The second is to facilitate responsible private investment in Africa agro-industries and boost intra-African trade and exports of products through increased financial activities.

The project general objective is to contribute to the creation of decent and productive job opportunities for young people, and women particularly, in the context of the current expansion of the T&G industry in Tigray. Intervention focuses on Tigray National Regional States, which is a region where the T&G industry is in rapid expansion, and where significant fluxes of origin and transit of migrants currently takes place. In this context, the specific objective is to support the GoE to establish productive and effective

8 training capacity at various levels of the textile and garment industry – including technical skills for basic operators and middle management, managers, as well as soft skills and institutional capacity. Ultimately, the project aims to support the establishment a Centre of Excellence for Skill Development in Mekelle, Tigray. The rationale of the project is to design and develop capacity building and training initiatives through a PPPs approach, and initially starting from the demands of the private sector. This approach is meant to enable the strategic engagement of key industrial actors currently in the process of operating in the region with relevant local, regional, and national public institutions. In turn this is expected to maximise the effectiveness of technical, managerial and institutional capacities of the T&G industry.

This report is divided in three parts. The first introduces key aspects of the projects, its objectives, and discusses the methodology that has been employed to select priority areas and target sectors. The second part of the report discusses the T&G industry in Ethiopia and then provides a specific focus on Tigray and the area of Mekelle. This second part draws on a review of the existing literature as well as on a socio-economic assessment conducted during the project’s inception phase based on qualitative methods of research analysis and data collection. The third part of the report outlines the project’s Action Plan and provides recommendation for implementation.

In recent years the textile and garment sector has proved a vital entry point to creating new employment opportunities throughout the developing world. Beyond the economic growth T&G manufacturing brings to developed countries, which most often facilitate the highest levels of the value chain, it also introduces significant opportunities to developing countries. As a result, the T&G sector is quickly becoming a significant vehicle to alleviate poverty through a model of export-oriented economic development. More often T&G serves as an important mechanism to introduce state of the art technologies. A trillion-dollar industry, the T&G sector brings new employment opportunities to millions living in developing countries throughout the world. Providing a foundation for industrialization, the T&G sector is helping to transform much of the global South. While Europe remains the largest market for consumers, averaging around 350 billion US dollars, the greatest amount of exports continue to be produced in China and India (Berhe et al., 2017).

Through a strategy of converting its largely agricultural economy into manufacturing, Ethiopia predicts its will reach middle-income status by 2025. In 2002, the Ethiopian

9 government prioritized the T&G sector with the Industrial Development Strategy through an emphasis on labour and exports. As a result, the sector is becoming one of country’s foremost employers, offering new opportunities for unskilled, and often women, workers throughout Ethiopia, particularly in the region of Tigray. In 2015, the Ethiopian government released the Growth and Transformation Plan II (GTPII) setting out strategic goals to develop manufacturing industries.

Among the aims of the GTPII is to further develop globally linked small-scale manufacturing, a target that proves central in order to meet the 2025 objective. As a result, Ethiopia is soon transforming into a significant production and sourcing site for global T&G buyers worldwide. After the implementation of the GTPII the local government in Tigray is working to attract new foreign direct investment into the T&G sector. The region now boasts five vertically integrated T&G factories, offering thousands of new employment opportunities.

Yet in spite of the T&G sector’s promise current operations in Ethiopia have proved underproductive and fail to be truly competitive in the global arena. In addition, the influx of foreign capital seeking cheap labour often undermines local working conditions. As global trends demonstrate emerging economies are vulnerable to undermining basic working rights in lieu of attracting foreign investment. While this suggests that cost is the only factor determining competitiveness on an international scale these trade-offs are not guaranteed, as investors and customers worldwide take into account working conditions more and more. Working conditions and living wages, alongside productivity and competitiveness are becoming important considerations not only for consumers, but also foreign investors. Creating the conditions for gainful employment and good work environments boosts productivity and competitiveness. Yet, in Ethiopia important questions remain about labour. According to Berhe et al. (2017) the majority of employees working in the textile and garment industry are not unionized, while more broadly a standard minimum wage has yet to be established. While workers cite unfavorable conditions to trade unions, management is often in support of unionization as it boasts productivity and competitiveness.

In Tigray a range of problems undermines further development in the T&G sector. Specifically labour is a persistent challenge – as the majority of the work force is equipped with low technical and soft skills. More broadly local institutions have proved an obstacle as a failure in communication leads to an inability to properly implement

10 polices of the central government. In addition, supporting institutions fail to properly provide relevant market, product and technology related data in a timely manner. Beyond institutional failures, the shortage of raw materials and necessary replacement parts for machinery that take a long time to replace is a consistent challenge. Adequate water supply, transport and facilities are also factors. Lastly, as labour proves inadequately skilled appropriate training facilitates are deficient throughout the region. As a result it is necessary to develop training at different levels including technical and soft skills for basic operators, technical skills for middle management and training for top management. Accordingly, in order to adequately address the challenges government cooperation will be necessary at both the regional and central levels.

The T&G sector holds great transformative potential for Ethiopia in order to meet its goal to reach middle-income status by 2025. Opening up new employment opportunities across a range of skilled and unskilled labour, the development of the T&G sector holds the ability to help address economic disparities among Ethiopian society. Yet, economic and social challenges stand in the way of unlocking the sectors full potential that require the cooperation of both regional and federal governments in order to overcome.

The geostrategic situation of Ethiopia makes it a source of, a destination for, and a transit region for migration and refugee flows, mostly within the region but also to the Gulf countries and Middle East (Eastern Route), Europe (Northern route) and South Africa (Southern route), as well as of internal displacement. Ethiopia is increasingly becoming a transit country for mixed migration flows, mainly from Eritrea and Somalia using primarily the Northern route, as well as a country of departure for migrants mainly using the Eastern route and to a lesser extent the Southern and Northern routes.

While the country has experienced double-digit economic growth rates during the last decade, the lack of economic opportunities, as well as of participation in economic life, are still very high, adding to a sense of disenfranchisement and constituting an important push factor for displacement.

Within this context, the Ministero degli Affari Esteri e della Cooperazione Internazionale and Direzione Generale per la Cooperazione allo Sviluppo (MAECI-DGCS) developed the project Stemming Irregular Migration in Northern and Central Ethiopia (SINCE) with support from the EU to create employment opportunities for young people and women in an effort to better understand the reasons behind recent migration trends. As a follow up

11 to SINCE, the Embassy of Italy in Addis Ababa requested UNIDO prepare a technical assistance project proposal to contribute to the reduction of irregular migration from Northern and Central Ethiopia by creating greater economic and employment opportunities for young women and men through the development of high potential sectors such as agro-industries and related (e.g. textile, leather, metal working, edible oil, etc.). This is the background against which this project was formulated.

In addition, the State Minister of Industry H.E. Bogale Felleke, in charge of the leather and textile sectors, officially requested UNIDO to provide technical assistance in improving the institutional capacity of both the Ethiopian Ministry of Industry (MoI) and the Ethiopian Textile Industry Development Institute (ETIDI), in order to meet the private sector requirements, facilitate the T&G sector growth, and play a relevant role in creating skilled labour force.

The T&G sector was selected for numerous reasons. First the T&G sector offers considerable potential for employment creation and contribution to national GDP. Second the T&G sector presents significant opportunities for income and employment multipliers. Third the T&G sector provides significant opportunities for economic integration of the national economy and in terms of creation of forward and backward linkages.

In addition to identifying the T&G sector as a main priority sector, the region of Tigray – and more specifically the area around Mekelle – was identified as the priority area of intervention. However, while the focus is concentrated on Tigray the project is expected to produce broader national repercussions, both in terms of capacity building to Federal institutions such as the MoI and ETIDI, as well as potentially providing a blueprint to implement skill development initiatives elsewhere in the country.

In recent years the T&G sector in Ethiopia has experienced a remarkable expansion and managed to attract the attention of key foreign investors and buyers, such as ITACA, H&M, G&T, Primark, Phillips Van Heusen, Tschibo, Tesco, Marks & Spencer, VF Corporation, and Inditex. In 2014, 36 T&G foreign direct investments projects were licensed, with an average capital investment of USD 140 million. These projects employ an estimated average of 2,500 people each.

T&G is among the most labour intensive sectors within industry and manufacturing. In providing considerable employment opportunities worldwide – especially to young women – the T&G sector is characterized by rapid market-driven changes as well as geographically dispersed production. With a rapidly growing young population and an increasing trend towards urbanization, Ethiopia offers ideal conditions for a rapid development of the T&G sector when it comes to labour supply. As noted earlier, employment creation for youth and women is one the top priorities of the GoE development strategy.

At the same time, in Ethiopia the cost of labour is lower than in many other T&G producing countries. However, as productivity of labour remains low, this comparative advantage does not automatically translate into a competitive advantage for the sector. Nonetheless, in the coming years the growth of the T&G sector driven by FDIs is expected to generate considerable job opportunities for women and youth that are either unemployed, or employed in the informal sector.

The sector has also the potential to attract a large workforce from rural areas previously engaged in smallholding farming. The sector is believed to offer additional advantages when it comes to rapid employment creation. These include the capacity of state bureaucracy to mobilize people up to the micro level, the potential for creating other labour-intensive spin-off industries – such as accessories and chemicals – as well as upstream linkages to cotton production for which Ethiopia has tremendous potential.

The T&G industry holds significant potential for rapid employment creation in the coming few years. Nonetheless, in order to uncap such potential, specific challenges need to be addressed. Challenges pertaining to employment creation can be divided in two main groups:

 Gaps in technical and soft skills  Gaps in creating an enabling environment

The gaps in technical and soft skills present numerous challenges, including:  Lack of adequate technical and vocational training (TVET) capacity  Lack of sufficient on the job training  High turnover and absenteeism  Lack of middle management capacity and supervisors  Resistance to change and lack of soft skills  Lack of a market-driven approach  Problems in fulfilling adequate quality standards

The gaps in creating an enabling environment present numerous challenges, including:  Sourcing of inputs  Lack of integration and limits to value addition  Institutional capacity and sector coordination  Access to finance  Upgrading machineries  Limited awareness on how to exploit preferential export markets  Trade promotion capacity

Tackling these challenges is fundamental to uncap the potential of the sector to create sustainable and productive job opportunities. A key finding of socio-economic assessment include the following:

 The companies surveyed and engaged in the discussion to establish the Centre of Excellence plan to hire 20,000+ workers in the next three years, and additional 10,000+ to achieve full capacity. These are conservative figures that do not account for small and medium textile companies, as well as major industrial operators already in the area such as ITACA/Calzedonia.  While the number of job seekers with a profile suitable for the textile industry (e.g. 18-25 years old, and Grade 9 or above) in Tigray is significant (~140,000), only about 5% of these can be sourced from Mekelle Municipality (~7,000). By implication, it is expected that the expansion of the T&G will be associated with significant fluxes of migrant workers from elsewhere in the region.  A significant number of workers are potentially available in the six wereda immediately bordering with Mekelle Municipality (~13,000).

 Existing training institutions (e.g. TVETs) are not able to meet the existing demand for trainings from both a quantitative and qualitative perspective.  Labour migration raises deeper questions about the transition to industrial life, which entails economic, social, and cultural transformations that need to be taken into consideration when developing trainings, particularly on soft skills.  Labour migration is complex and not unidirectional from rural to urban areas. Peri-urban sites where the industry put its roots become target of multiple fluxes from both the inner city and rural areas. In addition, at least in the short-term, labour migration is never permanent, and rather is characterized by frequent commuting and movements back and forth to the place of origin.  Over 85% of the employees in the textile industry are women with a low socio- economic profile, and eligible for a minimal entry salary. Industrial work is unlikely to enfranchise young women from existing social hierarchies within the household and the broader communities of origin.  While working, women are still expected to perform the same domestic tasks in the household. This and frequent social and cultural obligations in the community explain high rates of turnover and absenteeism. A particular concern is childcare for migrant workers that have no family network in the area where they relocate.  The textile industry and industrialization are regarded as important aspects of the country’s future, and have attached positive notions of progress, modernity and development. Industrial jobs have a higher reputation than jobs in other sectors, even when these pay a better salary. The textile industry is expected to create new jobs and tackle the problem of youth unemployment.  The fact that the textile industry offers initial low salaries has several implications. Regardless of how low these salaries are still very important in consideration of the substantial lack of alternatives that many youth face today, and of households’ reproductive strategies. Particularly, for those households with an agriculture background an additional cash income often constitutes an important risk diversification strategy.  Connected to the question of low initial salaries, work in the textile industry is usually regarded as a short-term strategy. Young workers plan to get enough skills and experience to move on to a better life.

In order to better facilitate job growth in the T&G sector job trainings through the establishment of a Centre of Excellence will be an important resource. The Mekelle Garment College (MGC) has been identified the ideal institution where to ground the

Centre of Excellence. The College boasts adequate equipment and facilities. MGC has a range of equipment suitable to produce a variety of products, with satisfactory facilities to host soft-skill trainings.

The planning, design and vision for the Centre of Excellence was conceived at two Public-Private Roundtables held in conjunction with both public and private industry stakeholders. The first Public-Private Roundtable on skill development in the Tigray Textile Sector took place in Mekelle on December 12th 2018. The roundtable brought together major industrial partners and public institutions. The industrial partners that attended are the following: H&M, Velocity, DBL, Strathmore Trading, and MAA garment. Representatives of public institutions included the ETIDI, the TVET Tigray bureau, the Mekelle Garment College, the Industrial Park Development Corporation (IPDC), and the Ethiopian Institute of Technology (EIT) of Mekelle University. The roundtable discussion was organized around two main aspects of skill development in the T&G industry: soft skills and technical skills.

As far as soft skills are concerned all the stakeholders agreed that this is by far a main challenge hindering the productivity of the industry. The discussion highlighted that there is a need for skill development initiatives that acquaint workers with the industrial culture, including how to behave on a factory setting, time management, industrial psychology, and health & safety regulations. It was stressed that soft skill initiatives must involve not only basic operators but also line supervisors, middle management, as well as managers. In addition, it was recognised that soft skill development cannot be dealt with in isolation from the social and cultural background of the workers. The discussion about technical skill development was equally productive. The general principle that was agreed upon was about a dual step training, part to be conducted in the training centre and part directly in the factory.

The second technical roundtable was held in Mekelle on January 23rd 2018. The roundtable brought together major industrial partners, along with representatives of local government offices, as well as of the national ETIDI and the Technology Institute of Mekelle University. The discussion was organized along 4 main topics: technical skill development for basic operators, technical skill development for middle management, skill development for managers, and soft skill development. In line with the previous roundtable, a general consensus emerged about thinking at the Centre of Excellence not as a static training centre, but rather as a dynamic, flexible, and adaptable platform to

16 provide a wide set of trainings depending on the demand of the industry and the market of the time. The Centre is expected to work as a platform hosting the most innovative ideas about how better to perform trainings at a certain point of maturity of the industry and the job market in the area of Mekelle, and in Ethiopia more broadly. The structure of the job market will change over time, and the Centre of Excellence will have to be able to adapt accordingly by providing trainings that are effective to meet a rapid pattern of change. While it was a general understanding that the current need for basic operators and middle management staff is the most pressing, the nature of the industry is going to change as more people get trained, and increasing levels of specialisation and diversification are achieved. For these reasons, it was general understanding of the stakeholders involved that a modular approach to the project means that the contents discussed for each training curriculum will constitute only the initial basis of what will be offered at the Centre of Excellence.

In line with the project’s PPP methodology, during the inception phase the UNIDO staff engaged with a number of stakeholders at different levels. In addition to the Italian Agency for Development Cooperation (AICS) in Ethiopia, these include:

 Governmental institutions at Federal and Local level: Ministry of Industry, Ethiopia Textile Industry Development Institute (ETIDI), Tigray Trade and Industry Bureau, Tigray TVET Bureau, Tigray Small and Medium Manufacturing Industry Development Agency (SMMIDA), Mekelle BOLSA, Mekelle Garment College, Mekelle Urban Job Creation and Food Security Bureau, Ethiopian Institute of Science and Technology of Mekelle University.  Private sector actors: Ethiopia Textile and Garment Manufacturer's Association (ETGAMA), Mekelle Industrial Park Development Corporation (IPDC), H&M, Velocity, DBL, Strathmore Trading PLC, MAA Garment, Calzedonia, Decathlon, Enterprise Partners (EP).  International Organizations and NGOs: European Union delegation, German development cooperation (GIZ), International Labour Organization (ILO), UK development cooperation (DFID), Japanese development cooperation (JICA), Italian Trade Agency, Don Bosco, Rainbow4Children, Volontariato Internazionale per lo Sviluppo (VIS).

The Ethiopia Textile Industry Development Institute (ETIDI) is a key partner in envisioning and developing the Centre of Excellence in Mekelle. The mission and

17 expertise of the Institute makes it the natural and ideal governmental partner to implement the UNIDO project, together and in close collaboration with the Ministry of Industry. In particular, the expertise and the national reach of ETIDI are critically important to develop a Centre of Excellence that become a Best Practice to implement elsewhere in the country. ETIDI staff contributed substantially to the discussion during the two public-private roundtables in Mekelle, and was instrumental in providing the project with a soft skill training manual. At a broader level, the Director of the Institute, Ato Seleshi Lemma, played an invaluable advisory role during periodical meetings that took place at the Ministry of Industry, at the presence of his Excellency Ato Bogale Felleke.

H&M has been instrumental in developing and formulating the UNIDO project from the very beginning. H&M offered support to coordinate training activities at different levels, and its staff played a very important role during the two roundtables organized in December 2017 and January 2018. DBL has been instrumental to the inception phase of the UNIDO project in a number of regards. The company led the development of a training curriculum for middle management and the staff made a substantial contribution to both roundtable discussions. Although Strathmore started to establish its presence in Mekelle during the inception phase of the project, the company committed to participate to the two roundtables organized in December and January. Strathmore provided a substantial contribution to the formulation of the technical skills for basic operators manual. MAA garment has been extremely important to the inception phase of the UNIDO project. Together with Strathmore Trading the company led the development of a training curriculum for technical skills for basic operators, and the staff made a substantial contribution to both roundtable discussions. Velocity expressed a substantial interest in the UNIDO project in relation to developing the soft skill training component.

The Ethiopian Institute of Science and Technology was initially contacted to discuss broader issues about potential synergies between Mekelle University and the Centre of Excellence. After some very productive conversation, staff members were invited to attend the roundtable discussions. The Institute developed a detailed curriculum for the training of managers that was very well received by the other public and private stakeholders. Local government offices at both Regional and Municipal levels contributed significantly to the discussion during the two roundtables.

Training manuals to be employed in the Centre of Excellence on Technical Skills for Basic Operators, Middle Management, Managers, and Soft Skills have been included to this report as attachments. The Action Plan provides specific recommendations on how to implement the activities in the Centre of Excellence on each of these four components. A preliminary estimation based on data and information collected show that during the duration of the project (3 years), the Centre of Excellence will be potentially able to train and place in the job market over 4,700 workers. Among these 4,200 are basic operators, 450 middle management staff, and 60 managers.

1. Introduction

As a follow up of the assessment conducted for the SINCE project1 inception phase, the present project has been developed to tackle one of the main roots behind irregular migration and displacement, i.e. youth unemployment and, more broadly, lagging economic opportunities. The general objective of this project is to support the Government of the FDR of Ethiopia (GoE) to create decent and productive job opportunities for young women and men through the development of the strategic Textile and Garment (T&G) sector. This is done by supporting capacity-building initiatives in the textile industry through a Public Private Partnership (PPP) approach. Intervention focuses on Tigray National Regional States, which is a region where the T&G industry is in rapid expansion, and where significant fluxes of origin and transit of migrants currently takes place. The project also responds to a specific official request from the Ethiopian MoI to support the sector. The project is articulated in line with the Valletta Action Plan2 under the chapter development benefits of migration, which addresses the root causes of irregular migration and forced displacement. The project targets two priority areas:

 Create employment opportunities and revenue-generating activities through strengthening the professional and soft skills of young people, with a particular focus on women, as well as broader institutional capacities in Tigray.

1 “Stemming Irregular Migration in Northern & Central Ethiopia (SINCE)”, SAP 160089. SINCE Project Output 0 envisages the preparation of a UNIDO technical assistance project proposal - “Output 0 - Inception Phase: Detailed Final Inception phase report plus a joint (ILO and UNIDO) inception phase report is produced: including a UNIDO technical assistance project proposal, results oriented ToRs incl. LOGFRAME, risk and stakeholder analysis, work plan, monitoring plan, budget prepared for SINCE implementation”. This task has been incorporated within SINCE project activities about Output 0, specifically, the activity 0.14 “0.14 A UNIDO Technical Assistance Project Proposal for supporting inclusive and sustainable development of the selected value chains is prepared and submitted to the PSC”. 2 The European Union (EU) has launched in November 2015, at the Valletta Summit, an “Emergency Trust Fund for stability and for addressing root causes of irregular migration and displaced persons in Africa”, made up of €1.8 billion from EU budget and European Development Fund, combined with contributions from EU Member States and other donors. 20

 Facilitate responsible private investment in Africa agro-industries and boost intra- African trade and exports of products through increased financial activities.

1.1. Project objectives

In this context, the specific objective is to support the Government of the FDR of Ethiopia (GoE) to establish productive and effective training capacity at various levels of the textile and garment industry – including technical skills for basic operators and middle management, managers, as well as soft skills and institutional capacity.

Ultimately, the project aims to support the establishment a Centre of Excellence for Skill Development in Mekelle, Tigray, through a PPP approach that favours the strategic engagement of key industrial actors currently in the process of operating in the region with relevant local, regional, and national public institutions.

1.2. Project background and rationale

The European Union (EU) has launched in November 2015, at the Valletta Summit, an “Emergency Trust Fund for stability and for addressing root causes of irregular migration and displaced persons in Africa”, made up of 1.8 billion EUR from EU budget and European Development Fund, combined with contributions from EU Member States and other donors.

The Trust Fund is an innovative mechanism under the EU’s Financial Regulation used in the field of development cooperation to pool large resources from different donors to enable a swift, common, complementary and flexible response to the different dimensions of an emergency situation. The Trust Fund benefits a wide range of countries across Africa that encompasses the major migration routes to Europe. These countries are among the most fragile economically and most affected by migration, and hence are expected benefit the most from EU financial assistance.

The Trust Fund aims at tackling root causes of irregular migration and forced displacement in countries of origin and transit, in particular by strengthening the rule of law, creating economic and education opportunities, and building better governance, and the effective sustainable return, readmission and reintegration of irregular migrants not qualifying for protection. This requires a firm commitment to supporting capacity building of third countries in the field of migration and border management, as well as to the stabilisation and development of these regions of Africa.

Over the past few years, migration has increasingly become an issue of importance for the Government of the Federal Democratic Republic of Ethiopia (GoE). Work has been initiated towards enhancing the framework for legal migration. In June 2015, a proclamation for the prevention and suppression of trafficking in person as well as smuggling of migrants was adopted, giving Ethiopia a tool to help prevent and tackle this increasingly important problem.

Furthermore, the EU and Ethiopia have signed a joint Declaration for a Common Agenda on Migration and Mobility (CAMM), reflecting the importance of Ethiopia as a key country of origin, transit and destination of irregular migrants and refugees from the Horn of Africa on the route to Europe. The GoE has been actively supporting the reintegration of returnees and is willing to address migration matters in a comprehensive way. Moreover, the country strategy outlined in the Growth and Transformation Plan II (GTP II) makes youth and employment a high priority and intends to achieve results in particular through the development of manufacturing industries, including through the opening of Industrial Parks (IPs) in the country. The goal of these parks is to promote industrial development and Foreign Direct Investments (FDIs) that generate employment and sustain economic growth and development.

Forced displacement, irregular migration, trafficking in human beings and smuggling of people are transnational challenges that affect Ethiopia to a great extent. A country with an estimated population close to 100 million inhabitants, Ethiopia hosts over one million displaced persons, including over 450,000 internally displaced persons (IDPs) and about 730,000 refugees, the largest refugee population in Africa. The geostrategic situation of Ethiopia makes it a source of, a destination for, and a transit region for migration and refugee flows, mostly within the region but also to the Gulf countries and Middle East (Eastern Route), Europe (Northern route) and South Africa (Southern route), as well as of internal displacement. Ethiopia has an open door policy to migrants and refugees fleeing

22 war, famine and hunger. In this context, it is often difficult to clearly distinguish irregular migrants from refugees. The concept of mixed migration has thus appeared to describe these complex population movements including refugees and asylum seekers, unaccompanied minors, victims of trafficking, economic migrants and others often travelling in an irregular manner. Ethiopia is increasingly becoming a transit country for mixed migration flows, mainly from Eritrea and Somalia using primarily the Northern route, as well as a country of departure for migrants mainly using the Eastern route and to a lesser extent the Southern and Northern routes.

According to demographic projections, more than two million young Ethiopians enter the labour market every year. The challenge of their socioeconomic integration is immense. A lack of success in integrating these young people would be a collective failure and it could risk destabilising Ethiopia. In addition, Ethiopia is regularly hit by humanitarian crises.

Although manifested differently according to local contexts, a complex set of drivers underpins forced displacement and mixed migration in Northern Ethiopia: lack of economic opportunities, marginalisation, natural disasters, and food insecurity are at the roots of the problem. While the country has experienced double-digit economic growth rates during the last decade, the lack of economic opportunities, as well as of participation in economic life, are still very high, adding to a sense of disenfranchisement and constituting an important push factor for displacement. Across the country, population displacement has continued or increased, with returns to places of origin decreasing, and a growing flow of mixed migrants has also moved across the borders, fuelling human trafficking and smuggling of migrants. A culture of migration, amplifying the success stories of those making a good living abroad, spreads throughout the Ethiopian society and constitutes a strong pull factor. Information may also have a key role on migration patterns. At the same time, Ethiopia is also a recipient country for refugees arriving in camps and irregular migrants. They are not allowed to access a regular work permit and, as a result, they survive relying on informal sector activities with no legal status. Insufficient data are available on the subject in Ethiopia.

Women, girls and migrants under the age of 20 are increasingly on the move and they face additional vulnerabilities during their transit or at the point of arrival. Despite the relatively low overall migration rate in Ethiopia if compared to other countries, migration rates have been increasing. 86% of all migrants in Ethiopia are working migrants, seeking

23 employment and 25% migrate from rural to urban areas. In Addis Ababa, internal migrants (all those not residing in the community of their birth) represent nearly half of the population, although there is a recent migration favouring smaller rural cities. A majority of migrants are young at the time of departure: the average age of a migrant in Ethiopia is 24 years old. There is also a large number of unaccompanied minors continuously arriving in Ethiopia (particularly from Eritrea) who are at high risk of trafficking and abuse. With more than 8,500 migrant child returnees registered from the total of over 160,000 deportees from the Kingdom of Saudi Arabia in 2013-2014, the issue of migrant children is an important focus for Ethiopia.

Within this context, the MAECI-DGCS developed a project initiative, with a budget of 20 millions EUR funded by the EU, entitled: “Stemming Irregular Migration in Northern & Central Ethiopia (SINCE)” for creating employment opportunities, especially for young people and women. SINCE operates on the country’s four largest regions: Tigray, Amhara, SNNPR, Oromia. A specific focus of SINCE are zones, small cities, rural towns, and major cities including Addis Ababa, where the incidence of potential migrants and returnees is higher.

As a follow up of the SINCE project, the Embassy of Italy in Addis Ababa requested UNIDO to prepare a technical assistance project proposal to contribute to the reduction of irregular migration from Northern and Central Ethiopia by creating greater economic and employment opportunities for young women and men through the development of high potential sectors such as agro-industries and related (e.g. textile, leather, metal working, edible oil, etc.).

The AICS/UNIDO initiative has been designed and developed in close coordination with the GoE, and the Ministry of Industry (MoI) in particular. During the “High Level MoI- UNIDO Planning Meeting - Manufacturing Sector” held in Addis Ababa on 14 December 2016, UNIDO received clear instructions from the MoI regarding priority interventions to be implemented in 2017 within the framework of the PCP-ETH. In this context, the State Minister of Industry H.E. Bogale Felleke, in charge of the leather and textile sectors, officially requested UNIDO to provide technical assistance to improve the institutional capacity of both the MoI and the Ethiopian Textile Industry Development Institute (ETIDI), in order to meet the private sector requirements, facilitate the T&G sector growth, and play a relevant role in creating skilled labour force.

1.3. Methodology

This section addresses three methodological aspects of the project. First, it discusses the methodology employed to identify the T&G as a priority sector and Tigray as a priority area. Second, it focuses on questions about the adoption of a PPPs approach. Third, it presents the methods of data collection and research analysis employed to conduct the inception phase’s socio-economic assessment.

1.3.1. Identification of priority sectors and areas of intervention

Identifying sectors that have the capacity to effectively create jobs in line with the objectives outlined in the GTP II national economic growth strategy is the core of the intervention and methodology followed by UNIDO. In this regard, an effective development strategy calls for the support to those sectors that generate higher added value and employment. The T&G sector was selected for the following reasons:

 Offers a considerable potential for employment creation and contribution to national GDP;  Presents significant opportunities for income and employment multipliers;  Provides significant opportunities for economic integration of the national economy and in terms of creation of forward and backward linkages.

The project relies on sector and value-chain development strategies targeting the T&G industry. The labour-intensity of the sector is a key parameters taken into account in the selection. However, the inclusive and sustainable development of the T&G industry in Ethiopia goes hand in hand with the creation of quality and productive employment opportunities.

In order to implement effective interventions with a significant impact on the creation of employment and economic opportunities, the identification of the areas of interventions was a priority addressed during the design of the project.

Criteria to identify areas of interventions included the following:

 Presence of existing interventions focusing on job creation and value chain development, in order to build on previous activities’ achievements.

 Coordination with existing Government socio-economic development plans: the areas should be part of on-going strategic development plans of the Government of Ethiopia.  Presence of public and private investments: the areas should be the target of public and/or private investments on which the project can rely on in terms of creation of sustainable employment and economic opportunities.

Criteria to identify the priority sectors included the following:

 Target areas: areas have been targeted and prioritized based on the employment creation opportunities, migration prone areas and beneficiaries’ needs base.  Employment: employment and wage levels, particularly for youth and women.  Size of Sector and its relevance to the target group: How labour-intensive is the sector? What is the share of youth (women and men) and women working or potentially working in the sector?  Work upgrading potential: After assessing the size and relevance of a sector, the general characteristics of the sector are assessed together with its potential for change towards the objective of decent work.  Intervention impacts: Finally the feasibility of stimulating change in a sector (value chain) is assessed. Change depends on internal and external factors, namely the capacity of the implementing agency to develop the sector and the capacity of the target sector to develop (which in turn depends on social capital, market demand for the products, etc.).

Based on the above-mentioned criteria the project identified the T&G sector as a main priority sector, and Tigray – and more specifically the area around Mekelle – as the priority area of intervention. However, the project is expected to produce broader national repercussions, both in terms of capacity building to Federal institutions such as the MoI and ETIDI, as well as potentially providing a blueprint to implement skill development initiatives elsewhere in the country.

1.3.2. Private Public Partnership (PPP) approach

The promotion of PPPs3 is central to the mission of UNIDO to ensure effective and sustainable interventions in the field of industrial development. For the implementation of this project the adoption of a PPP approach is key from many perspective. First, it allows the prospected intervention long-term sustainability and a holistic approach to the enhancement of the T&G value chain. Second, Core Business and Value Chain Partnerships harness the core strengths of the private sector and/or aim at changing the way businesses operate to be more in line with social, environmental and development goals. Third, PPP allow the formulation of training programmes that reflect the practical needs of the industry, and hence facilitate employability and the creation of productive jobs.

Co-operation between the public and private sector has become more commonplace in development circles and takes on various incarnations from the degree of involvement and amount of risk assumed by the private partner. In the past decade PPPs have garnered renewed interest. In 2008 the global financial crisis introduced new challenges for the development sector. Increased limitations on public resources and renewed interest in infrastructure has led many national administrations to look to the private sector to help subsidize projects.

These partnerships have been shown to help bolster local economies, improving infrastructure while improving local business and industry. PPPs introduce new resources that the public sector alone fails to provide. Most notable comes in the form of the technology and innovation the private sector can bring to public services and development initiatives. PPPs help to slowly involve the private sector in public enterprises, state-owned or operated, ultimately working to heighted the private sector’s role. As a result, increased skill and technology transfer can take place and allow for projects that operate with greater efficiency and professionalism.

Another important factor has to do with efficiency. The public sector and development industry is often criticized for its inefficiency, many proponents of PPPs claim involving the private sector helps improve time and spending. The World Bank claims, PPPs help introduce “budgetary certainty by setting present and the future costs of infrastructure

3 Adopting more socially inclusive and environmentally sustainable business operations helps to mitigate risk, develop new markets, and cultivate sustainable relationships with suppliers, customers and investors.

27 projects over time” (Word Bank 2016). In addition to strengthening the public sector, PPPs prove beneficial for the local private sector as well. Local firms often act as sub- contractors, resulting in new opportunities for small-scale local ventures (Word Bank 2016). Lastly, PPPs help mitigate risk, allowing the private sector to shoulder a portion of the financial, planning and operational burden.

Based on the above-mentioned premises, the inception phase of the project relied significantly on a PPP approach. The formulation of the Action Plan of the project was based on the mapping and involvement of key stakeholders from the public sectors – local and national government institutions and university institutes – the private sectors – foreign and national big T&G companies – as well as other donors, development partners, and civil society organizations. Individual meetings with all these actors were followed by the organizations of two Public-Private Roundtables on Skill Development, held in Mekelle on December 2017 and January 2018. The roundtables constituted the main tool through which project priorities, activities, and modalities of intervention were discussed and agreed upon. The outcomes of the two roundtables are discussed extensively in the Project Action plan of this Report.

The roundtables enabled discussing practical and conceptual aspects about the establishment of the Centre of Excellence in Mekelle. They were critical in validating the identification and selection of the Mekelle Garment College as a suitable institution where to ground and develop the Centre of Excellence (also discussed in the Action Plan). In addition, the roundtables enabled the establishment of a network of Private and Public partners that are now committed to support the establishment of the Centre of Excellence. This created the conditions for more focused one-to-one discussions to start discussing specific Project Cooperation Agreements to be signed during the project’s implementation phase. The PP Platform established during the inception phase of the project not only represents a space where project’s counterparts discuss and facilitate project implementation, but also an arena where the private sector continuously interact with public institutions to ensure the long-term sustainability of the Ethiopian T&G industry.

At a more practical level for the project, a main outcome of the two roundtables was the formulation, discussion, and drafting of training manuals to be adopted in the Centre of Excellence. Private companies led the formulation of specific training manuals on a variety of topics that were identified as priority during the discussion. Training manuals

28 were developed on technical skills for basic operators, middle management, managers, and soft skills training. All the manuals have been included as attachments to this Report. In addition, based on the in-depth analysis conducted during the inception phase and the experience of private sector actors, further “non-conventional” soft skills training activities were identified and discussed during the roundtable. The outcome of such discussion is also included in the Project Action Plan below.

1.3.3. Methods of data collection and analysis for the socio-economic assessment

The socio-economic assessment informing this Report is based on mixed qualitative methods of data collection and research analysis.4 These include an extensive review of the available literature on the T&G sector in Ethiopia, and more broadly in developing countries and the analysis of national and regional policy documents. Socio-economic statistics on Tigray and Mekelle Municipality were collected at several local government offices, such SMMIDA, BOLSA, Urban Job Creation and Food Security, and the TEVT Bureau. Statistical information was discussed in meetings with the officers responsible for data collection. Informal discussions, formal interviews, and meetings were held with T&G companies operating in Tigray, relevant national and local government offices, international development organizations and donors, as well as NGOs and other civil society organizations. These interactions enabled to discuss details about the project, mapping relevant partners and stakeholders, verifying potential overlapping and creating synergies, and eventually establishing a network to organize the two public-private roundtables discussed above. The same snowball method of formal and informal discussion was employed to find a suitable institutional location for the Centre of Excellence in Mekelle.

After a first screening of the data collected, and the outcomes of the two roundtables, it became clear that the socio-economic assessment required a broader scope than a narrow focus on the area around Mekelle. The main reason is that the rapid expansion of the T&G sector is associated with significant labour migration, with increasing amount workers expected to be sourced from the neighbouring rural localities. For this reason, further socio-economic assessment was conducted in six wereda bordering with Mekelle Municipality. Also in this case mixed qualitative research methods were used for the

4 Data collection was conducted with the precious support of the national staff of UNIDO, and particularly with invaluable help of Mr Tsegabu Teka, and Mr Samson Baraki. 29 investigation. Socio-economic statistical information were collected at relevant wereda offices, side by side with group discussion with key stakeholders, mainly local government officials. The aim of this research component was to assess potentials for labour migration to the industrial areas around Mekelle, as well as evaluating the institutional capacity in place for trainings.

A further important component of the socio-economic assessment was the collection of 28 in-depth interviews of workers and trainees currently employed in the textile industry. Interviews of about 30-40 minutes each were collected at the DBL-run training centre in Qwiha, as well as in the premises of MAA garment. Interviews were aimed at reconstructing the life trajectories of young workers and trainees in the sector and explore aspirations, challenges, and attitudes towards industrial work. This research component was also instrumental to discuss key gender dynamics pertaining the project and the future development of the textile industry.

1.4. Project priority areas

This section elaborates further on the reasons behind the decision to focus the AICS/UNIDO intervention on the T&G industry of Tigray, and more specifically to target the rapidly emerging textile industry in the area around Mekelle. This was initially motivated by the following reasons:

 The labour-intensity of the sector, with projection to employ a great amount of women and youth over the course of the next few years;  The significant investments currently promoted in the area of Mekelle by major international T&G corporations, which is going to boost the demand for manufacturing jobs at various levels, and, in the long run, driving a progressive specialization and diversification of the sectors to medium and small-scale enterprises;  The particular incidence of internal and international migratory fluxes in the region due to a number of reasons, including the proximity with the Eritrean border, as well as the above-mentioned drivers of the Eastern, Northern, and Southern route;  The specific dynamic of Mekelle city, and its peri-urban areas more specifically, which is currently characterized by very high rates of urbanization, and

progressive expansion of the city in the surrounding rural areas – this creating complex and multi-layered movement of young people seeking for new job opportunities.

Map 1. Tigray National Regional State.

In recent years the T&G sector has experienced a remarkable expansion and managed to attract the attention of key foreign investors and buyers. In 2014, 36 T&G foreign direct investments projects were licensed in Ethiopia, with an average capital investment of USD 140 million. In addition, T&G businesses will play a central role in the 15 Industrial Parks (IPs) that are currently under construction throughout the country (4 have been already completed).

‘modern’ and ‘traditional’ apparel production. Figures from the Central Statistical Agency (CSA) show the remarkable growth in the number of people employed from 72,899 in 2013 to 250,552 in 2016.

Tigray is at the forefront of this development. The first 12 sheds of Mekelle IP have been completed and the Park is currently operational as of January 2018. International and local companies have already booked a vast majority of the space available in the IP. The Bangladeshi Strathmore has rented over 70% of the Park for its own production. In addition, important international T&G firms have already invested in new production plants outside the park. For instance, these include the Indian Velocity, the Bangladeshi DBL, and the Italian ITACA. In the next couple of years the expanding T&G industry will therefore require a significant amount of workers with different degrees of specialization that are currently not readily available in the market.

Interviews with international business operators suggest that Tigray, and the area around Mekelle more specifically, is considered particularly suitable for the development of the T&G industry for a number of reasons. These include the prospective construction of an additional railway line connecting Mekelle to Djibouti, the commitment of the federal and local institutions to develop the T&G sector in the region, the availability of cheap water and electricity, and political stability.

With a rapidly growing young population and an increasing trend towards urbanization, the area around Mekelle is expected to become the next T&G global hub. The sector is going to require the hiring of thousands of manufacturing workers with different levels and degrees of specialization. However, the rapid growth of the sector and the extent to which decent and long terms jobs will be created is met by significant challenges. As employment creation for youth and women remains a top priority for Ethiopia, and the T&G sector presents a unique opportunity to achieve such objective, industrialization articulates significant social, cultural and environmental complexities. One reason why the Tigray is attracting international investments in the T&G sector is because the cost of labour is lower than in many other T&G producing countries (a fifth’s of China and half of Vietnam’s). However, as productivity of labour remains low, this comparative advantage does not automatically translate into a competitive advantage for the sector. While there is little doubt about the labour intensity of the T&G industry, as well as its current potential for rapid expansion, the extent to which the sector offers possibilities for creating decent job opportunities is more controversial.

1.5. Project priority sector targets

Despite the availability of a young and large labour force, Tigray’s T&G sector is constrained by the lack of sufficiently skilled manpower, in terms of basic operators and technicians, as well as specialists, designers, mechanics, and management supervisors. Lack of skills is an overwhelming priority that is directly correlated to low productivity and quality, and which currently hinders the potential expansion of the sector as a whole, including spin-offs to local small enterprises. Skill development is crucial for creating value addition, increasing profitability, as well as meeting buyer requirements. Crucially, on the side of workers skill development is important for claiming and negotiating better salaries.

The cost of labour is comparatively lower than in other T&G export oriented countries such as China, India, Pakistan and Bangladesh, and companies currently offer wages that in some cases can be as low as 800 ETB per month. While the law provides no minimum wage, in some cases this limits the possibility for negotiating other essential benefits for workers, such as health care, overtime, paid leave, and unfair dismissal cases. The lack of adequate controls, standards, and procedures constitute challenges to the achievement of decent work conditions. The question of low wages is connected to the very low productivity of labour, as well as the lack of skilled manpower. On the one hand low productivity of labour limits the possibilities for increasing wages while keeping the industry economically sustainable. On the other hand as soon as workers acquire new skills they immediately look for better salaries elsewhere, and in some cases attempt to open their own small business, which is often valued much more in comparative terms to wage employment.

Lack of skills is particularly significant for the downstream segments of the value chain such as production of finished garments. The lack of basic operators and supervisors reduces the productivity and quality, whereas the lack of designers limits the capacity of companies to create value addition. Both hinder the ability of clothing companies to expand production, and hence hire more workers. A connected issue is that lack of skilled manpower reduces the potential positive gains in terms of productivity stemming from the adoption of new machineries and technologies: as many large companies are currently upgrading their capacity through the adoption of capital intensive equipment, they often lack qualified staff to operate it. This is also one of the reasons why the T&G industry as

33 a whole, and downstream segments in particular, operate much below full potential capacity.

Major target areas of the AICS/UNIDO project are the following:

1) Lack of adequate technical and vocational training (TVET) capacity. 5 The education system in Ethiopia provides for the formation of both skilled and unskilled workers through a number of curricula at university level, as well as TVET colleges. However, the institutes have little capacity to produce the required quality and quantity of manpower.

2) Lack of sufficient on the job training. The lack of an effective TVET system leaves the burden to prepare a specialized workforce to the private sector. However, few companies provide adequate trainings, whose scope is often quite narrow.

3) High turnover and absenteeism: Low salaries provide little incentives to enhance labour productivity and loyalty. Low salaries are coupled by the lack of a working culture in the large industry, and lead to high levels of turnover and absenteeism. Currently turnover rate on average is 8.5% / month and absenteeism rate on average is 9.6% / month.

5 As indicated in the document “GROWTH AND TRANSFORMATION PLAN OF THE TVET SECTOR FOR THE NEXT FIVE YEARS (2015/16-2020)”, prepared by the GoE, the major challenges that need attention for ensuring TVETs development are the following:  “The structure of the technology army was not built on bases of knowledge, skills and attitudes to create the army at the expected level.  The development program implementing offices are unable to own the determinant role of assuring workforce competence and technology capacity building for competitiveness.  There are difficulties in making development programs centre for assessment and training by certifying occupational competences of professionals who are engaged in works and in selecting and promoting the best ones as industrial assessors and trainers.  Since institutions have not been expanded at regional and Federal levels, accessibility problem has been abundant  Since there is no strong connection among universities, research institutions, TVET and the industry, technology capacity building was not owned collectively and not yet become effective.  There is a wide gap between demand and capacity in the endeavour of transition from agriculture led to industry led economy.  Our trainers are not in a position to fully imitate technology based on value-chains.  There are constraints in terms of fully ascertaining the equitable benefits of women, the emerging regions and others who seek for different types of trainings.” 34

4) Poor efficiency: Efficiency is around 20% to 30% (max 45% in seldom cases and not continuous. The international benchmark for a profitable business is at 65% as a minimum).

5) Lack of middle management capacity and supervisors: Beside the lack of basic operators the T&G industry suffers from the absence of middle management personnel such as line managers supervisors. Management methods are outdated and do not respond to the current requirements of an industry facing global competition. The industry depends not only on the availability of man power with the right attitude but also on the technical competence which extends from operator to production manager; supporting staff for merchandising as well as mechanics. Looking at the broad demand on workers issues need to be address at various levels.

6) Resistance to change and lack of soft skills: Workers and managers lack sector- specific knowledge, and broader behavioural and factory ‘life-style’ trainings. Many employees come from very different backgrounds and often from a completely different life-style in agriculture.

7) Lack of Institutional capacities: Both the MoI and ETIDI require technical assistance in order to support the T&G industrial growth and improve the coordination among the stakeholders involved both public and private. The coordination among the activities and initiatives performed within the T&G sector by the development partners has also to be improved and inserted within the PCP- Ethiopia framework.

1.5. Project beneficiaries

The objective of the project is to create decent job opportunities in the emerging T&G industry of Tigray, with a particular focus on women and youth. Trainings are envisaged to facilitate the employability of basic operators and middle management staff in large factories operating directly in the T&G or related sectors. The project envisages a capacity building component whereby an effective system of training is established by creating stronger ties between private and public sector actors.

The project aims to support the establishment of a Centre of Excellence in Mekelle to provide such trainings based on a Public Private Partnerships (PPPs) approach. A PPP approach involves TVETs, universities, local and national governmental institutions, and key private sector actors currently operating in the area around Mekelle.

The Centre of Excellence is envisioned as constituting a main hub to improve the capacity of the system to create autonomously a sufficient amount of skilled workers – basic operators, middle management staff and managers – for the industry to develop in a socially and economically sustainable way. Ultimately, the expectation is to create a model potentially replicable in the rest of the country. The intervention is expected to mirror broader positive socio-economic impacts, including better salaries and increased opportunities for local industrial spin-offs and technology transfer. As a result of the process of capacity building in general, as well as the technical skill development, training and institutional support programs for the National Institutions working on the T&G industry, Ethiopia will benefit from a quality product development and a consumer protected supply chain.

Furthermore the project aims to support the MoI and ETIDI through institutional capacity building, i.e. the two national institutions leading and driving the growth and development of the T&G sector. At this level the project has the objective to strengthen the coordination of relevant stakeholders, including other international donors and public and private sector actors. The objective to improve the sector’s coordination aims to fulfil the guidelines provided by the PCP-Ethiopia framework.

The Tigray Regional State will benefit from the project in terms of increased capacity stemming from the establishment of the Centre of Excellence. In the next few years the T&G sector is expected to attract over 30,000 workers that are thus in urgent need for skill training. Out of these approximately 4,000 will be junior, senior or/and higher skilled professions. One central concern is that currently available trainings do not match the requirement of the industry, and therefore do not translate in the creation of decent and productive jobs. This applies to all levels, from basic operators, middle management, and managers.

The importance of skill development for the broader trajectory of the textile sector in Tigray was the topic addressed in a meeting that took place in Mekelle on 9 February 2017, and that brought together international development partners and international

36 private companies. The international retailer H&M provided an estimation of the workforce needed for establishing a sample factory equipped with 2000 sewing machines, as follows:

This figure clearly highlight that to develop effectively the industry requires not only trainings for basic operators, but also for junior and middle management, as well as managerial staff. This points at the need to establish a training facility – i.e. Centre of Excellence – that addresses questions about skill training in a broader, holistic manner.

2. The Textile and Garment Industry in Ethiopia

While the T&G industry has a long history in Ethiopia dating back to the Italian period when the first garment factory was established in 1939, since the return to a market economy in 1990s the sector was given particular consideration by the GoE for its poverty reduction and economic growth potential, given its labour intensity. Since 2010- 11 the T&G has been identified as one of the priority sector of the Ethiopian industrial policy. A significant transformation is the transfer of public owned T&G industries to the private sector.

As part of the development agenda set in the 2010-2015 Growth and Transformation Plan (GTP I) – whose overall objective was to lay out the structural conditions to transform Ethiopia into a middle income country by 2025 – the GoE included the T&G sector as one of the strategic areas for export growth and fast employment creation. While the ambitious initial plan to generate USD 1 billion worth of the industry’s export by the end of the GTP I period was not achieved (in 2014/15 accounted for USD 98.9 millions), in recent years the T&G sector has experienced a remarkable expansion and managed to attract the attention of key foreign investors and buyers, such as ITACA, H&M, G&T, Primark, Phillips Van Heusen, Tschibo, Tesco, Marks & Spencer, VF Corporation, and Inditex. In 2014, 36 T&G foreign direct investments projects were licensed in Ethiopia, with an average capital investment of USD 140 million. These projects employ an estimated average of 2,500 people each.

Current figures show that over 136 T&G manufacturing companies, ranging from medium to large scale, are currently involved at different levels in the segments of ginning, spinning, weaving, finishing and garment. In addition, a considerable number of start-ups and micro enterprises are involved in the sector at different levels and both in ‘modern’ and ‘traditional’ apparel production. Figures obtained from the Central Statistical Agency (CSA) accounting for the T&G sector for the last four years, show the remarkable growth in the number of people employed from 72,899 in 2013 to 250,552 in 2016 (see Table 1, Employees in the T&G sector, 2013-2016, Central Statistical Agency).

Table 1. Employees in the T&G sector, 2013-2016, Central Statistical Agency.

In line with the objectives outlined in the GTP I, the new Growth and Transformation Plan for the years 2015/16 – 2019/20 (GTP II) reaffirmed the focus on labour-intensive industrial products where Ethiopia has a comparative advantage given the relative abundance of labour and low wages during the plan period (GTP II, p. 106). Jobs in the manufacturing sector are expected to increase on average by 15% annually, from 380,000 in 2014/15 to 758,000 by 2019/20. Women and youth are expected to be the primary beneficiaries of the job opportunities in the manufacturing sector (GTP II, p. 117). Within manufacturing, the consolidation of the T&G industry will play a considerable role in rapid employment creation. At the end of GTP II the sector is planned to manufacture USD 2.18 billion worth of production, earn USD 779 million in export revenue, and to create 174,000 additional job opportunities.

The industrial development strategy of Ethiopia is expected to promote the T&G industry throughout the entirety of the value chain. It is assumed that the overall growth of the sector will potentially generate significant spill-overs in terms of opportunities for agriculture development through sustained cotton production – i.e. upstream linkages that create income for both farmers and investors – as well as laying the foundations for other industries to develop, such as for accessories, chemical, and other inputs which are currently imported. More broadly, the GoE approach to promote fast growth in the T&G industry was developed in the mid-2000s and is known as Top-Down Pulling Strategy. The strategy casts a primary role to central state intervention in developing the sector, and is based on a plan to accelerate the development of the apparel segment of the value chain first. This will in turn create the structural market conditions for pulling the development of the textile industry, as well as cotton production via increased demand. The strategy 39 assumes that the apparel industry will initially be heavily run by foreign investments and import of capital-intensive goods such as machineries. However, in the long run a progressive import-substitution will occur as soon as the apparel segment will achieve a critical threshold able to drive an expansion of the upstream segments of the value chain. From an institutional perspective, a significant outcome of the increased emphasis on the T&G sector by the GoE was the establishment of the Ethiopian Textile Industry Development Institute (ETIDI) in 2010. The Institute’s main mission is to lead, coordinate, and monitor the development of the sector, as well as to support the industry to speed up the establishment and competiveness of textile and apparel industry in international market. As identified by the ETIDI, in the coming years the T&G sector holds significant prospect for growth because of the following strategic advantages:

 Suitable Agro climatic conditions for cotton production;  Availability of a large and young workforce and relative low cost of labour for both skilled and unskilled workers;  Low costs for electricity (especially hydraulic energy) and water;  Relative proximity to Europe and preferential market access (e.g. AGOA, EBA, COMESA).

In addition to these strategic advantages, the GoE has set a number of incentives to attract FDIs in the T&G industry. The coordination of the FDIs is facilitated by the ETIDI, as well as the Ethiopian Investment Agency. Incentives include the following:  Significant state support through a number of incentives, tax breaks, profit tax exemption, reduced rates for land lease, and creation of dedicated industrial zones;  Advantageous rates for land lease;  Access to credit through the Development Bank of Ethiopia, 70% loan for 30% own equity;  Duty exemption for imported machinery and raw materials;  Exemption from the profit tax for up to 7 years depending on the size and location of investment;  Creation of dedicated Industrial Parks to support the T&G industry.

2.1. The T&G industry and employment creation in Ethiopia

It is common knowledge that the T&G is among the most labour intensive sectors within industry and manufacturing. In providing considerable employment opportunities worldwide – especially to young women – the T&G is characterized by rapid market- driven changes as well as geographically dispersed production. With a rapidly growing young population and an increasing trend towards urbanization, Ethiopia offers ideal conditions for a rapid development of the T&G sector when it comes to labour supply. As noted earlier, employment creation for youth and women is one the top priorities of the GoE development strategy. At the same time, in Ethiopia the cost of labour is lower than in many other T&G producing countries. However, as productivity of labour remains low, this comparative advantage does not automatically translate into a competitive advantage for the sector.

Nonetheless, in the coming years the growth of the T&G sector driven by FDIs is expected to generate considerable job opportunities for women and youth that are either unemployed, or employed in the informal sector. As explained by one manager in the T&G industry, the sector has also the potential to attract a large workforce from rural areas previously engaged in smallholding farming. Table 2 (Ratio of cost of labour to gross value of production by industrial group - public and private) highlights how the T&G sector is characterized by a relatively higher labour intensity as compared to other manufacturing industries in Ethiopia. The sector is believed to offer additional advantages when it comes to rapid employment creation. These include the capacity of state bureaucracy to mobilize people up to the micro level, the potential for creating other labour-intensive spin-off industries – such as accessories and chemicals – as well as upstream linkages to cotton production for which Ethiopia has a big potential.

Table 2. Ratio of cost of labour to gross value of production by industrial group - public and private. Source: Large and Medium Scale Manufacturing and Electricity Industries Survey, Central Statistical Agency, 2014/2015.

The gender dynamic within the T&G industry varies quite considerably between small businesses and large companies. While male dominates the former, especially when it comes to handloom for traditional garment production, basic operators in large industries tend to be constituted mostly by women. As in the coming years the growth of the sector will be mainly driven by FDIs to establish large-scale companies, it is possible to expect that a majority of the employment opportunities will target young women with a low socio-economic profile.

While there is little doubt about the labour intensity of the T&G industry, as well as its current potential for rapid expansion, the extent to which the sector offers possibilities for creating decent job opportunities is much more controversial. As noted in many interviews with local government officials, private sector, and NGOs the low cost of labour is a main reason currently attracting FDIs in the sector. The cost of labour is comparatively lower than in other T&G export oriented countries such as China, India, Pakistan and Bangladesh (see Table 3. Wage rate distribution in garment). In some cases low wages are the reason behind the relatively high turnover in the sector. The head of the Textile and Garment Federation of the Ethiopian trade union noted that a main

Figure 10: Population distribution by age in Ethiopia

problem with the current rapid growth of industry and manufacturing in Ethiopia is the Age Gelacknde r of0- minimum14 15-24 wage.25 -5The4 T&G55-64 sector65 makes no exception to this picture, and many years years years years years+ Macompaniesle 213762 currently43 955746 2offer 140232 wages18 182 that6602 in 12 some42171 cases can be as low as 800 ETB per month. FeFrommale the2130 84perspective54 9692275 of14 1762the 63union 1919 1212the lack15115 58of a minimum wage limits the possibility for Total 42684697 19249737 28199481 21017814 2753729 discussing andSour negotiatingce: CIA Fact book other essential benefits for workers, such as health care,

3.1.3 Lower covertime,ost factors of paidprodu c leave,tion and unfair dismissal cases. In addition, the T&G sector presents specific health hazard issues, for instance when it comes to the chemical processes Ethiopia has no predetermined minimum wage, and the minimum wages in practice is much less than otheemployedr countries, and in m dyeingany folds andless tha finishing.n some ma jor The text ile lack and a ofppa re adequatel controls, standards, and manufacturing countries. Other cost factors of production like energy cost, water cost, land leasing rate, cproceduresorporate tax etc . constituteare much less tchallehan othengesr count tories .the achievement of decent work conditions.

F igure 11: Wage rate distribution in global garments industry From the perspective of the big international investors currently operating in the country, the question of low wages is connected to the very low productivity of labour, as well as the lack of skilled manpower. On the one hand low productivity of labour limits the possibilities for increasing wages while

Source: BusTableiness O 3.ppo Wagertunity rateRepor distributiont Ethiopia – T einxtil garment.e and Appa rel Industry, 2keeping014 the industry economically 36 sustainable. On the other hand as soon as

workers acquire new skills they immediately look for better salaries elsewhere, and in some cases attempt to open their own small business, which is often valued much more in comparative terms to wage employment. A further element to consider when it comes to the objective of creating decent jobs is specific to prospected T&G large manufacturing plants. Interviews conducted in Tigray with a number of investors that are either currently planning to start large scale operations or are already operational show that while manpower is generally available, a specific problem is the recruitment of large numbers of people in one specific location. For this reason the availability of infrastructure, facilities, and services is crucial to limit labour turnover, as well as convincing a large number of people to relocate in the surrounding of newly established production plants.

In light of these issues, many investors in collaboration with the local government are planning to strengthen existing transport services, as well as planning the construction of facilities such as medical clinics, housing, as well as shops and other services. Other elements to take into account are the mechanisms of Social and Corporate Responsibility of large scale investors, which often commit producers to fulfil basic labour rights, as this

43 is demanded by the public opinion purchasing the end product in western markets. Finally, it seems that while in principle creating quality jobs in the T&G industry is not the main priority in the current phase of rapid industrial expansion, some specific conditions may favour in the medium and long run to bring about better work conditions in the direction of the objective of creating decent job opportunities.

T&G in Ethiopia is a sector that historically attracts a considerable number of migrant workers. Interviews with Ready Made Garments companies and clusters in Mekelle show how the workforce employed in the sector rarely originates from the areas surrounding the production site. For instance evidence from clusters at Gundish Meda in Addis Ababa show that a majority of the workers employed are migrants from the SNNPR, and particularly from Gamo Gofa zone. This shows that at different levels a rapid expansion of the T&G sector has the potential for generating employment opportunities for migrants or potential migrants. A recent study conducted by regional TVET offices in Tigray put in correlation the T&G industry with migratory patterns in the region. The study shows that the T&G industry has the potential to limit the economic migration both internally in Ethiopia, as well as international migration (Mekelle Textile Garment College 2013).

2.2. The T&G and exports in Ethiopia

In a recent study conducted in collaboration between the International Trade Centre (ITC) and ETIDI the export of apparel in Ethiopia is projected to increase annually of 35% to reach in 2020 US$ 320 million. Over 200 new firms are expected to enter the sector, which is going to provide additional 45,000 jobs through the development of 600 new production lines in yarn, textile, and apparel production. If these projections will be confirmed export-oriented garment production will become one of the driving force of the Ethiopian economy, and a central pillar of its industrialization policy. With appropriate support, the sub-sector holds the potential to generate significant employment opportunities in the very short term.

The expansion of the downstream segments of the T&G sector for export is driven by at least two factors. First, apparel manufacturing has been included among the main strategic priorities in the long-term development strategy of Ethiopia. Currently, measures to promote a rapid expansion of this segment of the T&G value chain include cheap land lease and rent in industrial villages, low interest rates for loan through the Development Bank of Ethiopia, institutional support by various government bodies in

44 marketing, duty free privileges and tax holidays. It is important to note that the same kinds of incentives are not provided for businesses operating in the local market. Apparel enterprises are restricted from operating in the domestic market because of the heavier the tax regime as well as lack of institutional incentives and support. As noted in interviews with private sector actors, it is worth noting that in recent years these incentives attracted the attention not only of international T&G firms but also of many local investors with little apparel manufacturing experience. After starting operation, the apparel enterprises encountered challenges that were not originally anticipated. It was assumed by many that fabrics could be easily sourced both from abroad and locally. In practice this was seldom the case.

As considerable government support is offered for speeding up the competitiveness of downstream segments of the value chain, in the short term the production of apparel and to some extent yarns for export is expected to grow rapidly. This is in line with available data (see Table 4, T&G export in Ethiopia, 2001-2014) showing that the majority of growth in the past five years was due to an expansion of apparel exports (74%), followed by home textiles and carpets (22%), and textiles (10%).

Table 4. T&G export in Ethiopia, 2001-2014, US$ thousands, ITC (2016).

Currently the export share of textile from total manufacturing export is 23.2%, whereas export share of textile from total export of the country is 3.5% (ETIDI 2016). While export of textile and apparel has increased markedly in the last few years (although from a very low base), since 2012/3 Ethiopia has become a net-importer of cotton due to the rapid rise in demand from upper stream value chain. Given also the current structure of the international market – characterised by an increasing demand for flexible and ‘full

45 package’ services – the industry will be mainly driven by large international retailers seeking for a production of finished or semi-finished garments. As result, from the perspective of the labour market, in the very short period the demand for skilled and unskilled workforce to employ in large factories is likely to increase sharply. This is confirmed by available evidence in recent policy and sector development reports (ETIDI 2016; ETGAMA 2014), as well as confirmed by interviews with relevant government bodies and private sector actors.

Beyond strong government support to strengthen export as a way to earn hard foreign currency – as well as the availability of a young and cheap workforce – a main reason currently attracting FDIs in T&G production for export is the preferential access to the EU and US, as well as the continental market. Together with other 39 countries in Sub- Saharan Africa, in 2001 Ethiopia became a beneficiary of the African Growth and Opportunity Act (AGOA). AGOA allows Ethiopia to export qualified products to the US market duty free, as well as without quota limitations. Evidence from ETGAMA (2014) shows that the growth of the apparel sub-sector in countries such as Swaziland, Lesotho, and Botswana has been largely driven by the impact of AGOA. While Ethiopia is still lagging behind, the potential for making the most of AGOA is significant. In a similar way, and still in 2001, the EU adopted the Everything But Arms (EBA) initiative to 49 developing countries. Under EBA Ethiopian exports except arms and ammunition are granted duty free access to the European common market. EBA is expected to operate in the long run, as in principle it is not subjected to periodical renewal. Under EBA quantitative restrictions are not mandatory, and they were imposed for a limited period only to products such as bananas, sugar, and rice. Available figures show that over 80% of the total exports of T&G in Ethiopia are directed to the European common market. Ethiopia enjoys preferential market access also within the Common Market for East and South Africa (COMESA), while a free trade agreement is in the process of being finalised between COMESA, the East African Community (EAC), and the South African Development Community (SADC). In showing the main export countries for garment production Table 5 (Destination of garment export in Ethiopia) highlights that a vast majority of finished apparel is currently exported to Germany (~75% of the total), with AGOA accounting for only 12.3% of total garment exports.

Total UK

Sudan 2015 Italy 2014 USA Germany

0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000

Table 5. Destination of garment export in Ethiopia

A further reason why the apparel segment of the value chain currently holds considerable potential for rapid expansion in the short run is the (potential) availability of essential inputs, such as cotton, as well as cheap water and electricity. It was noted earlier that cotton production offers considerable opportunities for expansion. While vast areas of the country offer suitable agro-climatic conditions, structural and market inefficiencies currently constrain the sub-sector. However, as soon as the growing demand from the downstream T&G industry will drive an increase in prices and hence the profitability of the sub-sector as compared to other cash crops, production is likely to increase sharply (see paragraph 6.3.3.1). Nonetheless, it is unlikely that such transformations will take place in the very short run. For instance, the conversion of large tracts of land to cotton farming may meet the opposition of farming communities, and hence raise issues of social justice. As noted by some private sector actors these issues are currently very important to branding strategies in T&G sector, as well as the Corporate and Social Responsibility of international companies and retailers.

Availability of water and affordable energy is central for successful and sustained production in the T&G industry. Ethiopia holds a considerable strategic advantage in this regard, especially if compared to other country in the region and in Africa more broadly. Available figures show that the cost of energy is much cheaper than in other export- oriented T&G countries such as China, India and Bangladesh (see Table 6, Cost of energy in Ethiopia). As lamented by some private sector actors the supply of electricity and water is not always stable, with power and water cuts potentially jeopardizing production being quite frequent. However, it is expected that in the short to medium term these supply and distribution issues will be addressed and solved. The GoE is currently investing in the modernization of the power grid, and the forthcoming opening of large hydroelectric plants (such as the Millennium Dam) is expected to guarantee a sustained

47 supply of cheap energy. In addition, the fact that the bulk of electricity in Ethiopia is or will be produced through renewable sources (primarily hydroelectric) is seen as an important added value for the branding of garments in western markets. Figure 12: Energy consumption in global garments industry

Table 6. Cost of energy in Ethiopia Source: Business Opportunity Report Ethiopia – Textile and Apparel Industry, 2014 As far as theTab potentialle 6: Cost Fforac tdevelopingors of Produ cbackwardtion among and var iforwardous RMG linkages exporting is c oconcerneduntries it was Comparison of Cost Factor of Production noted earlier how a main challenge of the T&G sector in general – and garment productionAttribu forte exportUnit co sint particularEthiopia Ba– nisg ltheades hlack In ofdia vertical Paintegrationkistan Tu rofke ythe valueChina chain. While the most promising backward linkage is that between cotton production and downstreamMinimu msegments USD per of 40the value7 chain,4 it is 1unlikely25 that8 0this is going600 to be 1d75eveloped in thewa gveryes shortMon th term . However, the current trend seeing international investors establishing integrated T&G factories, particularly in Tigray and forthcoming Industrial Parks,El speaksectricity toUS theD potentialper 0.04 for enhanced0.11 integration0.10 of garment0.08 production0.10 0.with28 upper Cost KWH Vietna stream segments of the value chain. In the medium term, this is likely to create mconditions 0.95 for otherBan kspin -offAn industriesnual 7.5 -8–. 5such 13- as1 5for accessories7-9 (G o–v tto) develop,7.5 as10 it( Gwillovt) be5. 5shown in the nextinte paragraphs.rest rate of (Govt) (Govt) 12-14 (Govt) 13 10 ( (Govt) rate Interest 12-13 14-17 (com. (commercial ( commercia 5.5 ( % (com. Bank) bank) commerc l bank ) commer The garment segment ofba thenk value chain is expected to ia growl bank rapidly) in theci al next few bank ) months,Wa tander withUS Dit theper need0.31 for specialised0.34 manpowerMyanmar in a variety of fields, including Cubic 0.88 basic cotextilensump toperators,i middle management staff, mechanics, etc. This is confirmed by on meter $ 0.38/CM interviews with private sector actors,ETP government officials, as well as civil society organizations.Land USD per .30-.75 2.75 (EPZ) leasing Square (IP) 0.35 rate meter – 2 non (IP)

37 48

2.3. Gap analysis of the T&G industry in Ethiopia

Based on what highlighted above the T&G industry holds significant potential for rapid employment creation in the coming few years. Nonetheless, in order to uncap such potential, specific challenges need to be addressed. It is worth noting that the following gap analysis is specifically thought in relation to the specific objective about promoting rapid employment creation. Challenges pertaining to employment creation can be divided in two main groups:

1) Gaps in technical and soft skills; 2) Gaps in creating an enabling environment.

2.3.1. Gaps in technical and soft skills

Despite the availability of a young and large labour force, Ethiopia’s T&G sector is constrained by the lack of sufficiently skilled manpower, in terms of basic operators and technicians, as well as specialists, designers, mechanics, and management supervisors. As noted in interviews with entrepreneurs and government officials, lack of skills is an overwhelming priority that is directly correlated to low productivity and quality, and which currently hinders the potential expansion of the sector as a whole. Skill development is crucial for creating value addition, increasing profitability, as well as meeting buyer requirements. Skill development is also directly connected to the employability of a significant amount of workers in the short term. Lack of skills is particularly significant for the downstream segments of the value chain such as production of finished garments. The lack of basic operators and supervisors reduces the productivity and quality, whereas the lack of designers limits the capacity of companies to create value addition. Both hinder the ability of clothing companies to expand production, and hence hire more workers. A connected issue is that lack of skilled manpower reduces the potential positive gains in terms of productivity stemming from the adoption of new machineries and technologies: as many large companies are currently upgrading their capacity through the adoption of capital intensive equipment, they often lack qualified staff to operate it. This is also one of the reasons why the T&G industry as a whole, and downstream segments in particular, operate much below full potential capacity. There are several factors that currently constrain skill development. A screening of available literature and documents highlight the following:

A. Lack of adequate technical and vocational training (TVET) capacity The education system in Ethiopia provides for the formation of both skilled and unskilled workers through a number of curricula at university level, as well as around 100 TVET colleges throughout the country that are specialized in the T&G sector. However, the institutes have little capacity to produce the required quality of manpower. Despite some notable improvement recently, specific problems include lack of adequate equipment and machineries, curricula not responding with the need of the industry, lack of qualified teachers, weak links between universities, TVET and the private sector actors. For instance, teachers lack knowledge of international best practices within the sector, as well as modern management practices that would stimulate more efficient practices. A further fundamental problem is the absence of internship programmes and quality standard certifications for the T&G sector, which limits the possibilities for students to gain enough practical experience. While the quality of training institutions is a main concern, the current capacity of TVET is well below the demand of the industry also from a quantitative perspective. As the T&G industry is expected to expand rapidly in the coming years, strengthening the capacity of TVET will increasingly become an overwhelming priority.

B. Lack of sufficient on the job training The lack of an effective TVET system leaves the burden to prepare a specialized workforce to the private sector. Given the current conditions there is a very strong correlation between effective on the job training and sustainable/successful business. However, few companies provide adequate trainings, whose scope is often quite narrow. A significant issue is that only large companies can afford adequate on the job training courses and appropriate HR development facilities. This is a significant bottleneck constraining the development of small entrepreneurial initiatives, and more broadly the growth of a competitive domestic T&G industry. More broadly, a gap exists between the expertise that can be accessed by local firms and that which can be accessed by foreign- owned companies: locally owned companies have weaker management in place. As local owners often lack access to significant expertise in the provision of trainings, in the medium term this may lead to a mismatch in which foreign companies gain an uneven edge in the competition with local firms.

C. High turnover and absenteeism While we noted earlier that low wages as compared to other T&G exporting countries are a main reason behind the current growth and potential of the sector in Ethiopia, this also

50 produces side effects. Low salaries, as well as the lack of financial incentives provide little incentives to enhance labour productivity and loyalty. Low salaries are coupled by the lack of a working culture in the large industry, and lead to high levels of turnover and absenteeism. As noted by some entrepreneurs, many workers skip work when presented with better paying job opportunities. In other cases assembly line workers are said to resist fixed shifts, this creating significant problems with overall factory management and organization. Poor working conditions, lack of adequate housing, medical services, and other amenities, also provide little incentives to loyalty and accountability. Additional issues leading to turnover and absenteeism include the lack of reliable transportations, as well as baby care for women. High turnover affects many companies’ productivity as trained workers are then replaced by untrained substitutes. Especially in the case of smaller companies this reduces the opportunity/cost of investing in quality trainings, as it limits the ability to capitalize from acquired skill sets.

D. Lack of middle management capacity and supervisors Beside the lack of basic operators the T&G industry suffers from the absence of middle management personnel such as line managers supervisors. A majority of existing managers were trained at a time when the T&G industry – and more broadly the bulk of the economy – was under public sector management and planning. As result management methods are out-dated and informed by practices not responding with the current requirement of an industry facing global competition. As noted in interviews with entrepreneurs, main issues constraining the performance of managers include the limited knowledge of modern technologies, market requirements, flexible models of production, modern machineries, as well as IT and HR management practices. Training in generic management skills such as planning, costing and pricing are currently highly demanded by the industry.

E. Resistance to change and lack of soft skills Given that a ‘modern’ T&G industry is currently under establishment, workers and managers lack sector-specific knowledge. Many employees come from very different backgrounds, at best from other industrial sectors, but most often from a completely different life-style in agriculture. In this sense it is of overwhelming importance for the education system to offer not only sector-specific trainings, but also broader behavioural and factory ‘life-style’ trainings. These include security, time management, and other trainings that would lead to more productive employees. As the industry stands currently, many workers and managers prove to have a strong resistance to change. These issues

51 can be addressed only by creating tighter connection between universities, TVETs, and on the job private-led trainings.

F. Lack of a market-driven approach A specific dimension behind the structural inefficiencies characterising the downstream segments of the T&G value chain are connected to the lack of a market-driven approach. Many of the former public owned large companies, as well as the bulk of medium and small enterprises are production-driven. Disconnections are particularly evident between producers and final buyers, but virtually characterises each segment of the value chain from cotton production to yarn spinning, weaving and knitting, and finishing. Lack of integration is a problem affecting small and medium companies especially, which are often unable to align product development with supply chain management, as well as coordinating effective skill development with the demands of final buyers. Reasons include lack of trade information, as well as lack of market-oriented mentality on the side of managers. Unsuccessful clustering and twinning experiences are precisely characterised by the lack of effective trade support networks, as well as the inability to make the most of shared information and research, such as contacts with potential customers.

G. Problems in fulfilling adequate quality standards Another key constraint currently inhibiting the T&G sector to operate at its full capacity – especially in relation to clustering and twinning experiments – is the lack of capacity to fulfil adequate quality standards for each segment of the value chain. This limits the ability of entrepreneurial initiatives to capture significant value addition, particularly when it comes to export markets. Furthermore, this inhibits the development of side industries such as that for accessories, and in turn force companies to rely on expensive import materials. A central concern is the poor understanding among firms throughout the value chain of the importance to establish and develop control systems within the production structures.

2.3.2. Gaps in creating an enabling environment

Despite its significant prospects for growth, the T&G sector is constrained by the lack of vertical integration of the value chain which limits the potential for significant value addition, and hence rapid employment creation. While this reflects the nascent status of the industry, at several levels urgent measures need to be taken to establish an enabling

52 environment for the sector to develop. Institutional support is crucial especially for effectively twinning and clustering medium and small businesses in a context where considerable market opportunities exist and can be exploited by fostering coordination and the structural integration of the sector. We noted earlier that streamlining the T&G sector is one among the top priorities of the GoE. However, while conducive policies and conditions have been set to promote export, less so has been done to favour the development of the domestic market. In addition, questions remain on the actual quality and effectiveness of institutional support, as well as the measures put in place to attract foreign and domestic investments in the sector. Gaps in the creation of a suitable environment include the alignment of the priority of public institutions with the needs of the industry; the establishment of an effective framework for cooperation between enterprises; the support to international accreditation and quality infrastructure; the certification of the production standards for export and targeted markets; effectiveness of Custom services and transportation; and access to finance. Issues connected to the creation of an enabling environment reflect the following gaps and bottlenecks:

1. Sourcing of inputs With the exception of labour and energy, at virtually each segment of the value chain a significant amount of inputs is not readily available and has to be sourced from abroad. This is particularly relevant for downstream segments of the value chain – particularly finished garment production – where the lack of locally sourced fabrics, accessories, buttons, threads, and packaging hinders the potential for value addition and expansion. In most of Ethiopia’s Asian competitors conditions for import as well as domestic supply for inputs are faster and easier. At a moment where the industry is ready for take-off this limits the dynamicity and flexibility through which production can adapt and respond to buyer demands. As far as domestic production is concerned, garment factories and especially small and medium scale enterprises have very limited knowledge in sourcing their own material. A main gap to the sourcing of inputs is that garment producers are not aware of best practices with regards to sourcing. Current and forthcoming international investments in the sector address this problem by creating vertically integrated textile mills sourcing inputs throughout the entirety of the value chain. While this is positive for export this put domestic producers in a condition of further disadvantage vis-à-vis the rapidly emerging large corporations for export. In addition, limited know-how, value addition, and quality jobs are likely to be created in Ethiopia in the short and medium periods. The textiles and fabrics sourced locally are often of inadequate both in terms of quantity and quality. The same applies for accessories and other side industries. Investors

53 see the domestic market as too small to be attractive with bureaucratic hurdles, costs for transport and sourcing further constraining potential for profitability.

2. Lack of integration and limits to value addition The sector current focus on the production of basic and low-costs goods is likely to boost the employment of low skilled manpower in the short term. However, the development and consolidation of domestic entrepreneurship needs to be compounded by adequate managerial skills, such as for design. Institutional mechanisms establishing spill-overs of know-how from the large industry to the small and medium companies are largely missing. A gap exists in the current ability of the T&G sector to enhance coordination between different actors as well as fully exploiting the potential value addition from uncapping the local entrepreneurship potential. A connected issue is the limited use of trade intelligence to adapt to the demands of an increasingly flexible global market, as well as the persistence of a production driven attitude. Potential for twinning, clustering and PPPs is significant for rapid and quality employment creation in the short to medium run.

3. Institutional capacity and sector coordination The nascent status of the T&G industry in Ethiopia reflects the lack of effective sector associations enabling the coordination of market intelligence, supply, quality requirements, as well as other services fostering integration. The same applies for the labour side, with union and workers organizations having little organizational capacity to support the objective of decent and stable job creation. The lack of institutional capacity hinders the provision of quality services in the fields of policy advocacy, trade promotion, quality management, worker rights, and health hazards. Improvements in these fields will allow the sector to meet market requirements, as well as sourcing a motivated and more productive manpower. Market expansion and employment creation are two interconnected objectives that can be promoted through promotion services and awareness campaigns from both the side of entrepreneurs and workers. A further gap exists in the capacity of public institutions to coordinate sector participants effectively. This produces an environment of mistrust and suspicion between companies, government institutions, TVETs and higher education institutions. Efforts needs to be done in creating an environment of trust in which different actors actively seek and make the most of increased integration and cooperation. This is an especially crucial element for effective twinning and clustering initiatives. Lack of coordination and cooperation hinders value addition and the vertical integration of the value chain. Enhancing communication

54 between different segments would allow for a more effective consolidation of industrial orders, a more flexible production, as well as more fruitful bargaining between different actors. Building trust is essential to transform unhealthy competition between companies and institutions into structural advantages for the sector to develop rapidly.

4. Access to finance The development of the T&G sector is significantly constrained by problems affecting access to credit, especially for small and medium entrepreneurial initiatives. Access to finance in Ethiopia still very much suffers from bureaucratic hurdles inherited from previous systems of state planning of the economy. The microfinance sector is largely in the hands of public-controlled institutions lacking skills for performing appropriate risk and loan analysis, as well as following heavily bureaucratized protocols and procedures not necessarily meeting the requirement of a rapidly transforming market. In comparison to other textile export oriented countries, companies in Ethiopia are forced to get credit at unfavourable terms with stringent collateral requirements that are difficult to meet especially at early stages of business development. Shortage of foreign exchange and working capital further limit the accessibility to flexible and advantageous financial products needed for the sector to take off in the domestic market. Banks are often slow, inefficient, and offer services that are quite expensive. Despite the Development Bank of Ethiopia is currently attempting to tailor products for the T&G sector that would facilitate access to credit there is still a long way to go for the market of capitals to be effective. A bias against small businesses – which in turn are those more in need for support – is particularly evident. Small and medium entrepreneurship schemes are those suffering the most from a properly functioning financial system which limits their capacity to engage in adequate capital upgrading, as well as to invest in value addition.

5. Upgrading machineries Reliance on outdate technology is a problem that affect the productivity of the sector – especially small and medium entrepreneurial initiatives – from many different perspectives. While only few companies have the capacity to upgrade their equipment, up to date machineries are directly correlated to greater value addition, as well as quality production. Even when equipment is up to date they are seldom used at their full capacity. In fact, the capacity to upgrade technology is affected by shortage of capital, as well as the availability of skilled manpower to operate new equipment. Lack of upgrading puts domestic small and medium enterprises in a position of disadvantage vis-à-vis other domestic and foreign large firms. Another issue constraining the adoption of up to date

55 equipment is the difficulty in identifying the appropriate technology. Many managers often lack exposure to international best practices and have little knowledge on what is available on the market, as well as how to tailor the needs of the production line with appropriate machineries. Lack of maintenance and budgeting are further issues constraining the adoption of new technology. Spare parts are sometimes difficult to find either because it is a problem to source them in the international market, or because suppliers have stopped producing them because too old.

6. Limited awareness on how to exploit preferential export markets Ethiopia benefits from a number of conditions that allow preferential access to global market, namely, locally produced goods can enter some of the most competitive regional and global markets duty free. Throughout the past decade these factors have proved significant to the rising growth of the Ethiopian T&G sector. These factors notwithstanding, the main gap is that stakeholders are often unable to fully exploit preferential market access opportunities. A key restraint proves limited awareness to both the available market opportunities and the requirements of entry. Available market opportunities are constrained by the lack of trade intelligence and information to guide firms to make the most of preferential trade agreements. In addition exporters fail to fully understand market entry requirements and when they are understood they are unable to meet the rigorous demands of preferential markets (i.e. price competitiveness, delivery time, quality, etc.). While improving trade intelligence will help to alleviate some of these concerns, it must be developed in tandem with an overall improvement in the quality of products being produced for export.

7. Trade promotion capacity In order to enter new markets and expand in existing sites stakeholders must engage in more effective trade promotion efforts. A main gap in micro and medium entrepreneurship initiatives proves a lack of skills in marketing and publicity, with effective marketing and sales strategies being absent. The lack of skilled managers constitutes a challenge that universities and other training institutions fail to properly address in order to serve the industry. Institutional support also proves lacking, for instance this is evident in regard to buyer-seller meetings and integrating supply-and- demand markets, as well as weakened capacities in the fields of coordination and technical support.

3. The Textile and Garment Industry in Tigray

This section brings together data collected at several local government institutions in Tigray; individual and collective interviews with corporate actors in the area of Mekelle, including major international firms; individual and collective interviews collected with workers and trainees of the T&G industry. Interviews with workers and trainees were collected at two sites: the MAA garment factory premises; the Qwiha training centre run by DBL.

The following is a list that includes the main stakeholders contacted and interviewed:

Organization Contact person Email Ethiopian Textile Industry Seleshi Lemma [email protected] Development Institute om (ETIDI)

ETGAMA/MAA garment Fassil Taddesse [email protected]

Tigray Trade and Industry Ambassador Addis Alem [email protected] Bureau Balema

Bureau of Labour and Ato Assefa Tegegne [email protected] Social Affairs (BOLSA) Ato Assefa Hadush [email protected]

Technical and Vocational Dr Mulugeta Hadis Weldu [email protected] Training (TVET) bureau

Mekelle Garment College Ato Getahun Legesse [email protected] Woldemariam Urban Job Creation and Kahsay Tesfay [email protected] Food Security Office

Small and Medium Tilahun Tarke Weldu [email protected] Manufacturing Industry Development Agency Mekelle Industrial Park Goitom Gebrekidan [email protected] Development Corporation (IPDC)

H&M Bezait Amare [email protected] Velocity Tefetawit Gebremedhin training.eth@vogue- intl.com Calzedonia Federico Fraboni Federico.Fraboni@calzedon 57

ia.it DBL Libelo Gebreselassie [email protected]

Strathmore Trading Sanjeeva Iperluma [email protected] (Ananta Group)

MAA garment Abebe Girmay [email protected]

Decathlon Vingneshwaran Sukumar Vigneshwaran.sukumar@de cathlon.com College of Science and Ashenafi Aregawi [email protected] Technology (Mekelle University)

Rainbow4Children Kunom Hailu [email protected]

Don Bosco Hagos Medhin [email protected]

VIS Chiara Lombardi Programme.eastafrica@voli nt.it ILO Kidist Chala [email protected] Marta Tsehay Sewasew [email protected] EU delegation Carl Daspect [email protected] u Maria-Elena Ruiz Maria-Elena.Ruiz- [email protected] DFID Lindi Hlanze [email protected] Enterprise Partners (EP) Michael Addisu Michael_Addisu@enterpris epartners.org GIZ Ulrich Plein [email protected] Elisaveta Kostova [email protected]

3.1. The Manufacturing Industry in Tigray

A central component of Ethiopia’s development strategy resides in transferring from an agricultural to an industrial economy. As a result, the Ethiopian government has drafted an industrial development strategy to delineate a framework for transformation. Through the Growth and Transformation Plan II (GTP II), the Ethiopian government set out a target to reach an annual GDP growth rate of 11%. The GTP II sets out to guide far reaching economic development, while increasing the manufacturing sector’s efficiency, productivity and competitiveness. During the GTP II’s second phase the manufacturing sector is expected to produce meaningful economic growth. The central government

58 anticipates that through developing the manufacturing sector significant gains will be made in the global performance of Ethiopian exports. The T&G sector is one of eight manufacturing sectors pegged to play a considerable role in transforming the Ethiopian economy.

The T&G sector has played a significant role throughout the developing world – building economic growth, social development, and creating new employment opportunities. Ethiopia offers great potential to not only produce raw material, but also its low wages and energy costs offer a comparative advantage over other developing countries. Modern manufacturing proves a recent development in the region of Tigray. The regional government is relying on sector’s potential for job creation and actively seeking foreign investment. As a result, five vertically integrated large industries have emerged.

3.2. The Textile & Garment Industry in Tigray

Espoused for its ability to create jobs the T&G sector has steadily become the focus of the national development strategy. With the full support of numerous human resource development schemes, the T&G sector holds the potential to generate employment for skilled and unskilled women throughout Ethiopia (Bureau of T&I, 2014). According Bureau of Trade, Industry and Urban Development (Bureau T&I) Tigray supplies over 10,000 initiatives in the T&G sector of which five are vertically integrated large industries, with the remainder relatively small operations.

From the perspective of the central government the T&G sector holds transformative potential to bolster trade and aid in reaching the nation’s development agenda. The potential benefits are contingent on the quantity and quality of the exported end product that is determined by the development of skilled labor and a dependable supply of raw materials and equipment. As a result, it will be vital to overcome bureaucratic obstacles both at the level of international supply, while expanding infrastructure to support the domestic production of raw materials. Lastly, while manufacturing promises an increased standard of living, T&G provides the lowest wages of all the manufacturing sectors (Bureau of T&I, 2014).

Manufacturing has proved a huge economic driver in the region of Tigray. The regional government has implemented an industrial development plan founded on import substitution, export development and technological transfer (Bureau of T&I, 2014). At the plan’s conclusion manufacturing is anticipated to play a main role in regional

59 development and provide a significant source of employment. Following the national government’s T&G sector is quickly transforming investment efforts throughout the region. Currently, Tigray boasts six licensed large-scale and over 10,000 small-scale T&G endeavours.

Trade unions are viewed as a positive resource, with management supporting new income generating undertakings conceived by local unions. In the T&G sector unions are united under the Confederation of Ethiopian Trade Union (CETU). Yet, despite institutional support employees prove reluctant to join trade unions.

In Tigray T&G manufactures are currently producing below capacity. Current challenges include a lack of experience, skill and knowledge at different levels, subpar quality, a lack of synthesis between downstream and upstream value chains, poor quality and dependability of raw materials. The poor productivity of T&G firms in Tigray corresponds to the shortage of raw materials. For example, notwithstanding the ability to produce domestic cotton, the entire yield is under the necessary demand of local firms. While local gins hold the potential to produce around 70,000 tons of cotton, in 2013 total production was nearly half of capacity. As a result, T&G firms locally operating must turn to imports to meet their requirements. This results in major delays, as the lead-time of importing raw materials is quite significant, granting firms less flexibility to respond to the changing demands and trends of the global market. Despite the large pool of local labor, the T&G sector is undermined by the absence of a skilled workforce. The absence of skilled operators, technicians and management directly contributes to lower productivity and quality – ultimately undermining competitiveness and profitability in the international arena. In addition, the absence of skilled labor undermines the ability of local firms to expand into higher levels of the T&G value chain. The need for skilled labor across all levels undermines growth and profitability, while limiting the potential gains (ETIDI, 2013).

Another major hurdle is the lack of understanding for quality requirements across the global market. Due to an absence of basic knowledge regarding practices and market requirements quality control is often largely ignored. This reflects not only a lack of awareness from the T&G organizations but is equally a result of low standards across the national level. Additionally, a key feature of the T&G sector is the rapid adoption of new technologies – a factor that requires new equipment every decade. As a result the T&G sector in Tigray fails to expand, because of the lack of resources available to reinvest in

60 machinery production is carried out on often antiquated technology. If firms had better access to financing machinery could be regularly updated – increasing the regions viability on the global market.

Another main obstacle is the capacity of public institutions to offer support to T&G firms in Tigray. Federal institutions have inadequate resources to advocate effectively for policy, offer market research, promote trade, and support management in regional T&G firms. In addition, the T&G sector in Tigray also lacks coordination between firms, which results in the inability to vertically integrate the value chain. As a result, the lack of coordination the sectors influence on the global market.

Perhaps most significant, beyond institutional limitations in Tigray to the T&G sector, the region lacks a sufficient supply of water. In the dyeing and finishing process water is a vital ingredient. Currently, only one firm in Tigray has access to an adequate supply of water. Without addressing the water limitations, growth in Tigray will remain limited.

An additional avenue to maximizing both efficiency and potential in the industry is by expanding infrastructure. As a land locked country the end product must travel great lengths to export. Firms average a cost of 4,000 USD to ship a sea container from Ethiopia to Kenya. In comparison to China, Ethiopian T&G firms spend 60% more in shipping from Djibouti to the US and European markets. As a result T&G firms in Asia often prove more competitive than their counterparts in Ethiopia.

3.3. The Mekelle Industrial Park (MIP)

As part of the strategic initiative Industrial Development Zones (IDZs) have been created throughout the country to promote growth in the T&G sector. For developing countries IDZs provide important infrastructure, aid investment, promote job growth and increase exports. IDZs have been shown to increase productivity and overall competitiveness. Among the benefits of IDZs includes their proximity to airports or ports to enhance exports, basic infrastructure and duty-free imports of production-related raw materials and inputs. Additionally, IDZs are appealing to foreign investors and have the full support of the Ethiopian government.

The Ethiopian government has taken a numerous steps to ensure the success of IDZs, for example providing essential infrastructures like roads, power, and water. The central government has provided significant consideration to the various export sectors that

61 include the creation of industrial zones – among the various export sectors the T&G sector takes precedence. IDZs are allocated to foreign investors who mobilize additional foreign investment. Currently, industrial estates have been granted to investors from China, Turkey, India, Egypt and Bangladesh.

IDZs are composed of clusters, a group of companies that are not only geographically linked but constitute similar fields in order to maximize shared resources like markets, technologies, and skilled labour. Cluster is a promising model in order to promote industrial development along for small and medium-sized initiatives. The cluster model not only improves industrial competitiveness, but also has been shown to help ease poverty by providing sustainable employment, while allowing for sustainable credit.

Mekelle Industrial Park is pegged to become a huge source of regional employment, while generating foreign currency income, and helping to achieve the nation’s goals of rapid industrialization. Due to its development Tigray has received a swell of international private investment. The Mekelle Industrial Park faces the same problems discussed earlier, including the availability of water and manpower, availability, infrastructure, and requires broad institutional support. It is also of vital importance that a climate favorable to business is further developed in order ensure investment. In conjunction with Mekelle Garment College, Mekelle Industrial Park hopes to train up to 10,000 operators annually. However, this will still be insufficient as the park demands more skilled labor. Various strategies have been planned in order to assure long-term employee retention, these include providing employees a sense of ownership as well as strong relationships between employee and employer.

3.3.1. Challenges facing Industrial Parks

While Industrial Parks hold enormous potential they are not without challenges. One of the most pervasive problems has proved the shortage of skilled labour. While Ethiopia has a large trainable workforce yet the T&G sector continues to face a scarcity of skilled manpower. A variety of skilled labour is required at different stages of the manufacturing process from operators, technical, supervisors, and managers.

Employees prove under skilled and lacking in basic knowledge due to inadequate training resources throughout the nation. As a result of inadequate training many investors send employees to Southeast Asia to build capacity. Additionally resources prove poorly integrated. For example an integrated channel between the textile industry institute, the

Ethiopian government, technical, vocational education and training centres, and other higher education institutes is not in place. As a result many technical, vocational education and training centres are simply unable to provide an adequate number of trained manpower. These challenges are impacting overall productivity and competitiveness.

An additional obstacle is insufficient infrastructure. Facilities are in difficult conditions including on-going power cuts, unreliable water supply, insufficient telecommunications, difficult custom procedures and protracted procedures to obtaining appropriate visa and work permits, and inadequate logistic systems. While the lack of integration between industrial parks and the city planning limit the potential for necessary of health care, accommodations and transport for staff. While during the early stages of construction proper infrastructure is consistently lacking. Another significant obstacle proves insufficient financial capital through foreign investment, as well as access to foreign currency. Banks are not providing the necessary financial support.

An additional concern has to do with insufficient salaries, which impacts productivity. Salary disputes are consistently raised by employees, who cite low wages, yet from the perspective of the government the low cost of labour is seen as an advantage. As a result some factories have begun to introduce incentive schemes to improve productivity.

Yet employee turnover continues to be a major obstacle, undermining not only productivity, but also quality and product deliverability. High turnover also results in the need to constantly retrain its workforce, leading to greater expense and lead-time. Employee accommodation proves another challenge, as an insufficient supply of housing results in workers having to rent high cost accommodations.

Another hurdle concerns construction. For example preliminary designs often fail to match the final product. In addition industrial parks face difficulties finding quarry sites and disposal areas during the construction phase. Another important factor has to do with political stability on a regional and national level.

In order to streamline the integration of industrial parks certifications prove paramount. These certifications are related to environmental management and compliance, management, social, productivity, labor, market competition, capacity utilization, production capability, waste management and other forms of compliance.

3.4. Socio-economic statistics

This section compiles statistics that were collected at several local government offices in Tigray. These include data at regional, zone, and municipality levels from a number of institutions: the Small and Medium Enterprise Development Agency (SMMIDA), the Bureau of Labour and Social Affairs (BOLSA), the Urban Job Creation and Food Security Agency, the Technical and Vocational Training (TVET) Agency, and the Mekelle Industrial Park Development Corporation.

Information was collected on available employment and unemployment figures, number of graduates, returnees from Middle Eastern countries, textile and garment trainees for the Mekelle Industrial Park. Data are disaggregated by gender, age and administrative unit, and are aimed at providing a picture of how many potential employees can serve the emerging textile and garment industry around Mekelle. The regional and zone statistics serve to contextualise the data for the area around Mekelle, and to assess potential for labour migration.

In addition detailed reports were compiled for six wereda surrounding Mekelle municipality. Each report summarizes key socio-economic statistics, as well as the discussion of key points with local government officials and other relevant informants. The decision to pay particular attention to these wereda is motivated by the expectation that a significant amount of workers serving the textile industry and its expansion will come from outside Mekelle. The aim was to assess how many employees could be sourced from secondary towns within a 50 km radius from Mekelle, as well as current availability of trainings and awareness of the emerging textile industry.

Main findings from the data and information collected are the following:  The number of job seeker in the region is significant (367,916 people). Assuming that the textile industry targets employees that completed at least Grade 10, the total figure of approximately 140,000 people is still very significant (see Table 7).  The municipality of Mekelle accounts for only 5,54% of the total number of job seekers in the Region. The Municipality is also the zone administration with the lowest number of job seekers (20,408). By implication, it is very likely that the industry will need to source employees elsewhere in the Region (see Table 7).  Figures available for Mekelle Municipality highlight that the highest number of job seekers concentrates within the bracket Grade 9-12. As the textile industry

seeks for Grade 10 and above employees, it can be contended that the needs of the industry match the supply available in the labour market (see Table 10).  Only about 12% of the trainings to prepare workers to the Mekelle Industrial Park are conducted with people coming from Mekelle Municipality (13,7% pre- screening; 12,3% grading; 11,9% soft skills). This highlights that a vast majority of workers in the textile industry around Mekelle will not be sourced locally but elsewhere in the Region (see Table 9).  Table 9 and 11 clearly show that women are the main target of trainings. On average, only about 15% of the total people enrolled in trainings are men, and about 85% are women. The fact that this ratio is more or less the same across the region, at zone level, and in each of the sub cities of Mekelle, clearly highlights that a quota system is implemented in the training system.

3.4.1. Tigray Regional State statistics

Table 7. Unemployment figures in Tigray disaggregated by education level and Zone administration (2016-17)

University Zone Uneducated Grade 1-8 Grade 9-12 TVET Graduates Graduates M F Sum M F Sum M F Sum M F Sum M F Sum S.East 7110 5005 12115 5640 4459 10099 4525 3683 8208 1198 810 2008 209 77 286 East 4006 3442 7448 12519 7972 20491 13911 10272 24183 1135 881 2016 703 395 1098 West 3549 3853 7402 9015 6275 15290 5315 3714 9029 156 142 298 24 15 39 Central 12388 8572 20960 30633 15420 46053 20161 14811 35427 1218 1025 2243 862 415 1277 N.West 10053 9514 19567 16968 14346 31314 9462 9976 19438 644 663 1307 257 165 422 South 8713 8341 17054 7499 6086 13585 7861 6099 13960 2008 1965 3973 611 303 914 Mekelle 324 592 916 2023 3267 5290 4429 5177 9606 1285 1622 2907 859 830 1689 Total 46143 39319 85462 84297 57825 142122 66119 53732 119851 7644 7108 14572 3525 2200 5725

Zone Total M F Sum Data collected from the SMMIDA regional

1 S.East 18686 14034 32720 office. Figures capture the number of people that

2 East 32274 22962 55236 are currently seeking employment. Data are

3 West 18059 13999 32058 disaggregated by level of education, gender, and

4 Central 65171 40243 105960 Zone.

5 N.West 37384 34664 72048 6 South 26692 22794 49486

7 Mekelle 8920 11488 20408 Total 207732 160184 367916

Table 8. Provisional Unemployment figures for 2017-18 (until May 2017)

Level of Education Male Female Sum

1 B.A. Degree 2289 1828 4117

2 TVET/Diploma 5073 5480 10553

3 Grade 9-12 22169 23883 46052

4 Grade1-8 13475 15389 28864

5 Uneducated 3872 5119 8991

Total Sum 46887 51662 98549

Data collected at the Urban Job Creation & Food Security Agency. The table compiles provisional unemployment data for the Tigray Region, as they have been collected in the current year (2017/18) up to May 2017.

Table 9. Trainings for prospective workers in the Mekelle Industrial Park (MIP) (until 2017)

Zone Screening Graduated Soft Skill Training

M F Sum M F Sum M F Sum

1 South East 833 1044 1877 350 401 751 350 401 751

2 East 885 7928 8813 851 5440 6291 851 5134 5985

3 West 1326 4769 6095 1002 3845 4847 996 3703 4699

4 Central 1262 6200 7462 1031 5380 6411 320 4635 4955

5 North West 102 1741 102 96 1638 1734 96 1637 1733

6 South 808 2924 3732 720 2374 3094 720 2388 3108

7 Mekelle 242 4239 4481 200 3061 3261 192 2696 2888

Total Sum 5458 27104 32562 4250 22139 26389 3525 20594 24119

Data collected from the Regional TVET Agency, refers to aggregate figures up to October 2017. The table shows the number of people that were pre-screened for training, graduated from training, and received specific Soft Skills training in the whole region. The data is meant to capture availability of workforce to source the Mekelle Industrial Park.

3.4.2. Mekelle Municipality statistics

Table 10. Unemployment figures in Mekelle Municipality disaggregated by education level and Sub City (2016-17)

B.A. degree TVET Grade 1-8 Grade 9-12 Uneducated Total Sub City M F T M F T M F T M F T M F T M F T

Hwelti 86 90 176 65 219 284 504 686 1190 612 653 1265 0 0 0 1267 1648 2915

Ayder 53 28 81 61 94 155 161 43 204 563 389 952 0 0 0 838 554 1392

Kedamay 155 133 288 187 145 332 200 245 445 444 417 861 0 0 0 986 940 1926 Weyane

Qwiha 14 21 35 29 43 72 177 286 463 801 681 1482 12 24 36 1033 1055 2088

Semien 290 375 665 428 498 926 606 820 1426 806 1017 1823 0 0 0 2130 2710 4840

Adi Haqi 56 44 100 37 82 119 123 163 286 191 210 401 28 26 54 435 525 960

Hadnet 84 65 149 201 247 448 569 548 1117 713 714 1427 43 69 112 1610 1643 3253

Sum 738 756 1494 1008 1328 2336 2340 2791 5131 4130 4081 8211 83 119 202 8299 9075 17374

Data collected from the BoLSA office. Figures capture the number of people that are currently registered in the employment registry in Mekelle. Data are disaggregated by level of education, gender, and Sun City administration.

Table 11. Trainees from Mekelle Municipality to be employed in Mekelle Industrial Park (Until October 2017)

Registered at Under training in Soft Regional SMMIDA Achieved graduation Skills (after graduation in (Data from Mekelle the TVETs) Sub-city SMMIDA) M F Sum M F Sum M F Sum

1 Qwiha 24 397 421 18 305 336 14 318 332

2 Adi Haqi 46 860 906 35 563 598 35 563 598

3 Hawelti 41 701 742 36 568 604 36 568 604

4 Hadnet 66 1003 1069 83 927 1010 64 852 916

5 Ayder 20 468 488 18 379 397 20 329 349

6 Semien 30 571 601 24 429 453 20 403 423

7 K/Weyane 15 239 254 15 197 212 15 196 211

Total 242 4239 4481 229 3368 3610 204 3229 3433

Data collected from the Mekelle SMMIDA office (until October 2017). The table shows the number of people that were pre-screened for training, graduated from TVET, and received specific Soft Skills training after graduation in Mekelle. The data is meant to capture availability of workforce to source the Mekelle Industrial Park.

Table 12. Mekelle Returnees from the Kingdom of Saudi Arabia

N.o Sub City Male Female Total 1 Ayder 20 69 89 2 Hadnet 21 30 51 3 Semien 34 81 115 4 Adi Haqi 7 19 26 5 Kuiha 17 36 53 6 Hawelti 38 82 120 7 Kedamay Weyane 10 31 41 Total 147 348 495

Data collected at the BOLSA office in Mekelle. The figures refers to the number of returnees from the Kingdom of Saudi Arabia that have been registered in the list compiled by the BOLSA.

3.4.3. Socio-economic assessment of six wereda surrounding Mekelle municipality

While initially the socio-economic assessment was thought in relation to Mekelle Municipality, in the course of the research it became clear that the projected expansion of the textile industry in Mekelle would soon require the sourcing of labour from the surrounding areas. The evidence presented in the previous paragraph clearly reflects that, also from an institutional perspective, existing trainings already started targeting potential workers from the neighbouring districts and the whole region more broadly.

For this reason, the geographic reach of the assessment was expanded to include the rural towns within a 50 km radius from Mekelle. This section compiles detailed reports for six wereda surrounding Mekelle municipality. Each report summarizes key socio-economic statistics, as well as the discussion through semi-structured interviews of key points with local government officials and other relevant informants.

The decision to pay particular attention to these wereda is motivated by the expectation that a significant amount of workers serving the textile industry and its expansion will come from outside Mekelle. The analysis indeed reflects that training activities are currently conducted in each of the wereda investigated. Another finding is that, like in the area of Mekelle, the textile industry has generated significant expectations for new job opportunities. Map 2 below shows the location of the six wereda where data were collected. These wereda are Degua Temben, Hintallo Wajirat, Enderta, Saharti Samre, Wukro Town, and Kilte Aewlallo.

Map 2. Wereda targeted by socio-economic assessment around Mekelle

3.4.3.1. Degua Temben

Degua Temben wereda administration is located in Hagereselam town 50 KM far from the region’s capital Mekelle. The wereda has approximately 24 Tabias, small administration units, of which three are small cities, Hagresselam, Endamariam and Tukule.

A. Estimated Population and households for 2017/18

Total population Number & Number of HH Type %age Male Female Total Male Female Total Number of 63,346 66,461 129,807 23,591 8,120 31,711 Population & HH % age share 48.8 51.2 100 74.4 25.6 100

B. Number of Students and schools for 2017/18

Number of students Number of Education level Male Female Total school

Elementary school 16,210 15,205 31,415 61

Secondary school 1,932 1,733 3,665 3

High school 365 193 558 1

Total 18,507 17,131 35,638 65

%age share 51.9% 48.1% 100

C. Number of unemployed youth and women registered for 2017

No. of unemployed Level of Education Male Female Total

Illiteracte 1,438 1,016 2,454

Elementary school (1-8 Grade) 2,587 1,495 4,082

Secondary school (9-10 Grade) 1,063 843 1,906

High school (11-12 Grade) 32 20 52

Certificate and Diploma 59 47 106

Above Degree graduate 9 2 11

Total 5,188 3,423 8,611

%age share 60.2% 39.8% 100

D. Number of students enrolled in the TVET Center by sector for 2017/2018

Number of registered students 2017/18 Sector Male Female Total

Construction 58 26 84

ICT 29 33 62

Accounting (level I and II) 38 39 77

GM 0 31 31

Total 125 129 254

%age share 49.2% 50.8% 100

E. Number of trainees for Mekelle Industrial Park until August 2017 (Grade 8-12)

Number of people registered for Number of people that completed training Item training Male Female Total Male Female Total Registered and 250 450 700 21 387 408 Trained % age share 35.7% 64.3% 100 5.1% 94.9% 100

F. Qualitative in depth discussion with stakeholders

Two experts from the wereda Small and Medium Manufacturing Industry office and one team leader from the wereda Social and Labour Affairs, explained that, due to its labour intensive nature the textile sector creates a lot of permanent job opportunities for a large number of unemployed Ethiopians in the wereda/region. The regional government and wereda administration has been creating public awareness through media (local radio, TV) and by organizing public conferences about Mekelle Industrial Park. As a result, the community in the wereda has developed a better understanding of the Park’s ongoing activities. In addition, around 700 young people received a 5 days soft skills and technical training on textile and garment. The

training created high expectations among the participants and, as it was conducted a while ago, trainees were now putting pressure on the local TVET about when they would be employed in the industrial park. There are also many individuals in the wereda who were already engaged in established industries in Mekelle, like Velocity. These workers were generally happy about their job in the industry, stable income and skill development, but expressed dissatisfaction regarding salary which is low in comparison to purchasing power and with the existing labour wages in Mekelle.

Youth attending the public awareness conferences and based in Mekelle expressed an interest to work, and are eagerly awaiting the opening of the Mekelle Industrial Park. In general, those interviewees expressed a preference about finding job in Mekelle rather than seeking it elsewhere, for example going to Middle Eastern countries.

The respective wereda office representatives such as TVET, Manufacturing, and Youth and Sport Affairs have experience in organizing and providing soft skill training. During the discussion, they explained that three experts from TVET and one expert from the Manufacturing office (SMMID office) have already received three days of practical training from the regional government on delivering soft skill training. A wereda representative expressed an interest to host the soft skill training in local towns and agreed to support the local TVET through the Manufacturing Sector and Youth and Sport Affairs office. They are also looking to have TOT training, manuals and transportation costs from respective offices.

Contact list

Name Organization Mobile Number

Kindeya Girmay Planning and Finance Office 0923413835

Haftu Yehdego SMMID office 0914202445

Mearg G/yohans SMMID Office 0914861040

Gebretsadik Leake SMMID Office 0914794367

Aregawi H/kiros Social and Labour Affairs 0914037683

Abeba Tadesse Agriculture 0921997944

3.4.3.2. Hintallo Wajirat

A. Estimated population and HH 2017/18

Type Total population Number of HH

Male Female Total Male Female Total

Number of Population & HH 89,945 92,820 182,765 30,984 10,869 41,853 %age share 49.2% 50.8% 100 74.0% 26.0% 100

B. Number of enrolled students and school number for the year 2017/18

Enrolment Number of Education level Male Female Total schools

Elementary school (1-8) 21,068 20,233 41,301 83

Secondary school (9-10) 3,283 3,337 6,620 4

Preparatory 691 456 1,147 1

Total 25,042 24,026 49,068 88

%age share 51.0% 49.0% 100

C. Number of unemployed people

Level of Education No. of unemployed

Male Female Total

Illiteracy 203 97 300

Elementary school (1-8 Grade ) 467 310 777

Secondary school (9-10 Grade) 4,033 2,778 6,813

High school (11-12 Grade) 15 11 26

Certificate and Diploma 83 71 153

Above Degree graduate 36 9 45 Total 4,837 3,276 8,114

%age share 59.6% 40.4% 100

D. Number of enrolled students in 2017/2018 in Adigudom TVET center

Number of registered students 2017/18 Sector (level I-IV) Male Female Total

Auto 76 20 96

Construction 60 7 67

ICT 98 30 128

GMFA 19 8 27

Furniture Making 36 0 36

Electrical 18 64 82

Accounting 49 34 83

Total 356 163 519

%age share 68.6% 31.4% 100

E. Number of people registered and trained for soft skills in Mekelle Industrial Park in August 2017 (Grade 8-12)

Number of people registered Number of people trained ***

Male Female Total Male Female Total Registered 1,908 740 632 1,276 66 674 and Trained %age share 33.1% 66.9% 100 8.9% 91.1% 100

*** Trainings were given in 4 wereda towns for 5 days.

F. Qualitative in depth discussion with stakeholders

Discussion was undertaken with 7 representatives from the following offices: TVET (2), Youth and Sport Office (1), Labour and Social Affairs Office (1), MSE Office (3) and Small and Medium Manufacturing Industry Development Office (1).

Public awareness about Mekelle Industrial Park was generated through local media, a conference, and the organization of an exposure visit. As a result of these initiatives there is a better public understanding that the park will create a large number of jobs due to its labour intensive nature. It is also expected that the Park will help solve the existing problem of unemployment for youth and women. More broadly, the textile industry will offer great benefits by creating job opportunities, technology transfer to local people and technical skill know-how.

During registration and provision of training participants raised the following points. Participants manifested a deep interest and willingness to work in the textile industry and are willing to relocate closer to the Industrial park. In the registration format there is a question concerning interest to permanently move to the Industrial Park, and all the participants answered “YES”. Nonetheless, questions about salaries and work conditions were raised in a number of occasions.

Local officials raised concerns that their wereda will not be able to benefit from the activities conducted at the Centre of Excellence in Mekelle. They believed that coverage will be limited if soft skill training is provided by the Center of Excellence. They believe that the soft skill training should be provided by the wereda, and they have the willingness to host the training themselves, led by TVET and the Manufacturing Office with the support of the SME Office, Youth and Sport

and Labour and Social Affairs Office. It was reported that three experts for TVET and one expert from the Manufacturing Office have already received three days training organized by the Regional TVET Bureau in Axum town. Local capacity to deliver trainings would benefit from additional TOT training, manuals and sharing of experience.

Contacts S/n Name Organization Mobile Number

1 Tadelu Kindeya Plan and finance office 0914025589

2 Aekelom Eyasu Plan and Finance Office 0914325777

3 Girmay Mekonen TVET 0914500982

4 Tsegay Negasi TVET 0914210113

5 Kelali G/Mikael Youth and Sport office 0914370784

6 Shumuye Gezoe Social and labour affair 0914119917

7 Mekonnen Hagos MSEs office 0914779596

8 Kedir Umer MSEs office 0914112918

8 Yemane Hadera SMMIDA (manufacturing ) office 0914810473

9 Tesfay Heylom MSEs office 0914547018

3.4.3.3. Enderta

A. Estimated population and households for 2017/18

Type Total population Number & Number of HH % age Male Female Total Male Female Total

Population & HH 64,173 64,555 128,728 15,329 12,593 27,922 %age share 49.9% 50.1% 100 54.9% 45.1% 100

B. Number of enrolled students and school number for 2017/18

Number of enrolment students Number of Level of Education Male Female Total school

Elementary school ( 1-8) 12,240 12,204 25,444 55

Secondary school (9-10) 970 1,024 1,994 5

Preparatory 88 35 12

Total 14,298 13,263 27,561 60

%age share 51.9% 48.1% 100

C. Number of unemployed people

Level of Education No. of unemployed by gender

Male Female Total

Illiteracy 625 532 1,157

Elementary school (1-8 Grade ) 1,163 1,236 2,399

Secondary school (9-10 Grade)

662 781 1,443 High school (11-12 Grade)

Certificate and Diploma 154 99 253

Above Degree graduates 48 28 76

Total 2,652 2,676 5,328

%age share 49.8 50.2 100

D. Number of registered and trained youth and women for Mekelle Industrial Park in August 2017 ( from Grade 8th to 12 Grade ) Item Number of registered for the training Number of trained

Male Female Total Male Female Total Registered and Trained 10 560 570 10 299 309 %age share 1.8% 98.2% 3.2% 96.8%

There is no TVET centre in the wereda.

Contact list

S/n Name Organization Mobile Number

1 Desta Hailu Education office 0914760605

2 Woldu Ayele Plan and Finance 0914730319

3 Bemnet Tsegay SMMID office 09148269884

4 Selomon Hagos SMMID office 0974619315

5 Tedros Youth and sport office 0914753989

3.4.3.4. Saharti Samre

A. Estimated population and households for 2017/18

Type Total population Number of households

Male Female Total Male Female Total

Number of Population & HH 71,508 73,019 144,527 23,845 7,531 31,376 %age share 49.5% 50.5% 100 76.0% 24.0% 100

B. Number of enrolled students and schools for 2017/18 Number of students enrolled ** Education level Number of schools Male Female Total Elementary school ( 1-8) 17,207 16,598 33,805 55

Secondary school (9-10) 1,838 1,918 3,756 3

Preparatory 449 242 691 2

Total 19,494 18,758 38,252 60

%age share 51.0% 49.0% 100 ** The TVET college is very new and began teaching in the last academic year.

C. Number of registered unemployed youth and women

Level of Education No. of unemployed ***

Male Female Total

Illiteracy 3,015 1,910 4,925

Elementary school (1-8 Grade ) 1,606 1,290 2,896

Secondary school (9-10 Grade)

910 656 1,566 High school (11-12 Grade)

Certificate and Diploma 75 98 173

Above Degree graduate 85 25 110

Total 5,691 3,979 9,670

%age share 58.9% 41.1% 100 *** Registered unemployed

D. Number of enrolled students by department for 2017/2018 in Samre TVET collage Number of registered students 2017/18 Sector Male Female Total Construction (Level II and IV) 62 63 115 ICT (Level II and IV) 24 75 99 Accounting (Level IV) 12 11 31 Auto (Level II) 16 13 29 Electrical (Level II) 14 28 42 Furniture (Level II) 7 9 16 Total 135 199 334

%age share 40.4% 59.6% 100

E. Number of people registered and trained for soft skills for Mekelle Industrial Park until August 2017 (from grade 8-12)

Item Number of people registered**** Number of people trained

Male Female Total Male Female Total Registered 449 607 1056 31 502 533 and Trained %age share 42.5% 57.5% 100 5.8% 94.2% 100 **** Age of registration: - limited to 18-35 years old.

F. Qualitative in depth discussion with stakeholders The qualitative in-depth discussion was comprised of five participants including the wereda administrator, the heads of the wereda MSE Office, Labour and Social Affairs Office, and the TVET Vice Dean and Youth and Sport Office. The discussion was very encouraging and participants were actively involved.

A first issue discussed was the definition of unemployed. The following 5 criteria applies to individuals that register as unemployed, determining their relative position in the rank: 1) the definition is limited to people in the 18-35 bracket; 2) landless youth and women living in rural areas; 3) youth without permanent employment; 4) youth without a source of income; 5) students in school were not taken into consideration.

Local officials explained that awareness about the textile industry was generated among civil servants and people at different levels through local media, conferences, local TV, newsletters, and radio since the establishment of the Industry park in Mekelle.

The participants contended that the wereda will be a major beneficiary of the Mekelle Industrial Park (MIP). The Park is expected to create permanent employment opportunities, acquiring skill and knowledge training, and technology transfer. The wereda has received a quota from the regional government to register youth for employment opportunities at MIP and to provide soft skill training. Accordingly, registration and soft skill training for about 533 was already successfully given. Registration was limited to 90% and 10% for young women and men, respectively, as the textile industry has a greater demand for women than men.

The wereda administration and the youth in general expressed concern regarding low wages. The community, and youth in particular, have expressed high expectations to find permanent jobs in the industries establishing in Mekelle. Registration and training were conducted in September 2017, and now participants are eager to start working as soon as possible.

Concerning hosting soft skill training, the wereda administration stated clearly that institutes such as TVET, Manufacturing Office have no other responsibility apart from creating employment opportunities for the youth and they consider the provision of soft skill training to be their main mandate. However, they are keen to receiver additional capacity building, printed materials, manuals, and incentives.

Contacts

Name Organization Mobile Number

Tesfay Yohanes Education Office 09145364762

G/slasia H/Mariam SMMID Office 0914117262

Teklemedihin G/kiros TVET 0914834174

Tadesse Desta TVET 0914009477

Shishay h/slasia Youth and Sport office 0919432131

Said Salih MSE 0914127828

Bry Hadgu Social and Labour Office 0914023157

Haftum Tsegay Youth and Sport Office 0914834174

Mebrat Bezabeh Wereda Administration 0914726583

3.4.3.5. Wukro Town

A. Estimated population and HH for 2017/18

Type Total population Number of households

Male Female Total Male Female Total

Population & HH 24,320 25,760 50,080 9,802 4,201 14,003 %age share 48.6% 51.4% 100 70.0% 30.0%

B. Number of enrolled students and school for 2017/18

Number of students Number of Education level Male Female Total school

Elementary school ( 1-8) 3,610 3,441 7051 7

Secondary school (9-10) 1967 2004 3971 4

Preparatory 444 443 887 1

Total 12 6,021 5,888 11,909

%age share 50.6% 49.4% 100

C. Number of people unemployed

Level of Education No. of unemployed by gender

Male Female Total

Illiteracy 4 17 21

Elementary school (1-8 Grade ) 84 265 349

Secondary school (9-10 Grade) 457 623 1080

High school (11-12 Grade) 35 65 100

Certificate and Diploma 38 75 113

Above Degree graduate 26 17 43

Total 644 1062 1706

%age share 37.7% 62.3% 100

D. Number of enrolled students by sector in Wukro TVET center for 2017/2018

Number of registered students 2017/18 Sector Male Female Total Accounting (Level II & IV) 41 102 143 General Motor Fabrication Assembly (Level II & IV) 63 35 98 Auto (Level II & IV) 75 26 101

Industrial Electrical machine Drive (Level II & IV) 76 26 102 Barbending (Level II & IV) 77 26 103 Survey (Level II & IV) 38 35 73 Building Electrical Installation (Level II & IV) 31 7 38 Hard Ware & Networking (Level II & IV) 8 45 53 Secretary (Level II & IV) 0 61 61 Sanitary 11 12 23 Masonry (Level II & IV) 6 11 17 Kitchen Operation (Level II ) 27 29 56 Total 453 415 868 %age share 52.2% 47.8% 100

The TVET centre also provides a non-formal training for the duration of 5 days to those who want to establish their own small businesses in different sector. Accordingly the TVET centre in Wukro town has trained around 2,538 people from September 2017 to mid of February 2018.

E. Number of people registered and trained in soft skills for Mekelle Industrial Park in August 2017 (Grade 8-12) Number of registered people Number of trained people **

Male Female Total Male Female Total Registered and Trained 0 740 740 571 571 %age share 100% 100%

** The training was given by Wukro TVET centre in collaboration with Wereda Small and Medium Manufacturing Industry office for 5 days

3.4.3.6. Kilte Awellalo

A. Estimated population and HH for 2017/18

Type Total population Number of households

Male Female Total Male Female Total

Population & HH 66,199 69,302 135,501 21,558 9,438 30,996 %age share 48.9% 51.1% 100 69.6% 30.4% 100

B. Number of enrolled students and schools in 2017/18

Number of students Number of Education level Male Female Total schools

Elementary school (1-8) 13771 12,988 26,759 61

Secondary school (9-10) 1,419 1,519 2,938 3

Preparatory 155 62 217 1

Total 15,345 14,569 29,914 65

%age share 51.3% 48.7% 100

C. Number of unemployed youth and women in the wereda

Level of Education No. of unemployed people

Male Female Total

Illiteracy 76 35 111

Elementary school (1-8 Grade ) 912 186 1,098

Secondary school (9-10 Grade) 924 496 1,420

High school (11-12 Grade) 31 7 38

Certificate and Diploma 9 4 13

Above Degree graduate 2 0 2

Total 1,954 728 2,682

%age share 72.9% 27.1% 100

D. Number of people registered and trained in soft skills for Mekelle Industrial Park August 2017 (Grade 8-12)

Item Number of people registered Number of people trained

Male Female Total Male Female Total Registered and 1,246 948 149 1,097 49 899 Trained %age share 12.0% 88.0% 100 5.2% 94.8% 100

E. Qualitative in depth discussion with stakeholders

The in-depth discussion was carried out with four representatives of Wukro Town and Kilte Aewlallo wereda experts/coordinators from different offices (Head of Micro and Small Enterprises Development Office, Representative from Wukro Town TVET Office, Representative from the Youth and Women Affairs Office and the coordinator of the town’s Small and Medium Manufacturing Industry Office).

Concerning public awareness in the town and wereda about the textile industry, public perception is positive and information is circulated through the media and conferences organized in the wereda. Accordingly, most of the public recognized that the establishment of the textile industry around Mekelle would help address the problem of youth unemployed in both the wereda and region.

Meeting participants claimed at this time most of the wereda’s inhabitants have expressed an interest to work in the textile industry. They believe the textile sector offer better opportunity to

90 acquire new basic and specialized technical skills and generate stable income, with the potential to start their own business with the knowledge and skills acquired. However, concern was expressed that those currently working in the textile sector are making low salaries, far less than those employed by small business owners.

Meeting participants also claimed that youth living in the wereda and Wukro were willing to move to Mekelle to secure permanent employment in Mekelle Industrial park. During orientation and registration for the Mekelle Industrial Park a majority of the applications were filled within one week. The wereda has also trained experts (4 experts for three days) and has experience in delivering soft skill training. Generally speaking, they have an interest and willingness to host the soft skill training at wereda/town level. However, meeting participants noted that trainings hosted by the Center of Excellence must be made available to the wereda through the local TVET.

Contacts

Name Organization Mobile Number

Gatu Tilahun Plan and Finance office 09147832062

Mehari G/slassia Social and Labour affair 0914150011

Aeziab G/medihin Plan and Finance office 0919067603

Amare Desta MSE office 0914005827

Gidey Berhe TVET center 0914733673

Hailu Abrha Youth and Women Affair 0918819248

Temesghen Asmelash SMMID office 0923413164

Abba G/here Yohannes St. Maire College 0911712374

Brhane G/hiwot Youth and sport office 0921587280

Zufan Halefom Education office 0923352441

Brehane Asefa Plan and Finance office 0914091940

3.5. In-depth interviews with workers and trainees

In this section, the discussion draws on 28 in-depth interviews with workers and trainees in the T&G industry conducted in the premises of MAA garment factory and in the Qwiha training centre, where at that time DBL group conducted trainings for workers. Full transcripts of these interviews have been compiled in Annex 1. Findings from the interviews have been grouped into themes and discussed in relation to the broader development trajectory of the T&G in Tigray, as well as socio-economic statistics of previous sections. Findings have also been contextualised and balanced through other formal and informal interactions with industry operators, local and regional government officials, as well as other informants during several fieldwork visits between October 2017 and January 2018.

3.5.1. Thematic analysis

Expectation and aspiration of a better future The textile industry is regarded as a fundamental step to build a better future for Tigray and Ethiopia. From a broad perspective industrialization is intrinsically attached to views of modernity and progress, and for this reason a consistent theme emerging in interviews is that the current is an important and potentially turning point in the history of the country. Young trainees and workers regard industry and industrial life as the future especially in opposition to agriculture and rural life, which is rather seen as the past. There is therefore a strong developmental ethos attached to the transition to industry. This mirrors official and institutional discourses about the importance to invest on industrialization, attract foreign capital, and make the most of the current conjuncture to create a lasting legacy for future generations, with in mind the objective of achieving “middle income status” by 2025 outlined in GTP2. As a result of this broader vision it is common opinion among young workers and trainees that in ten years Mekelle and Ethiopia “will look like a developed country”. Therefore, the current conjuncture is characterised by considerable expectations about what industrialization will deliver, and is associated with broad notions of economic development for Ethiopia.

At the level of the individual, these expectations are more pragmatically translated into questions about new job and employment opportunities. Interviewees identify in unemployment and increasing cost of living as the two major challenges that people currently face. Industrialization is not only about expectations for a better and vague

92 future for the country as whole, but it is about tackling important societal challenges, the main one being youth unemployment. In a context where a growing number of young people complete Grade 10 education, interviewees contend that today basic education does no longer automatically translates into jobs. For this reason the textile industry presents important opportunities for younger generations. Getting a job is attached with the value about independence and building own families. Getting a job in a modern setting – this is how many see industry – has the additional value of participating in the building of the country’s future. Industrial life is regarded as driving a broad-based socio- economic upliftment of Mekelle, Tigray, and Ethiopia.

Interviews further highlight that the reputation of the textile industry is higher than other sectors even when these sectors pay more and offer better conditions. One young woman interviewed decided to leave a better-paid job that in her mind had no prospects, for the opportunity to become textile worker because “this allows me to grow”. Working in the industry is seen as an investment in the future. What attracts young workers is to acquire new skills that they can then use in different ways and pursue further studies. Also attractive is the perspective of job stability and access to a number of facilities and services offered by the industry, such as the health clinic.

Transition to industrial life A main recurrent theme emerging from interviews points at issues related to the transition to an industrial life. This is a complex process that goes beyond the transfer and acquisition of new skills, and that entails deeper economic, cultural and social transformation.

At a basic level, working in the industry raises issues about personal and family time management. A majority of the prospective workers in the textile industry is not used to work on a precise time schedule. However, lack of punctuality and absenteeism must be regarded as practices that are beyond the control and decision of the individual. Interviews show that main reasons are not because of lack of commitment or laziness. Workers are late and/or don’t show up to work because they often have to perform a number of social and cultural obligations that are beyond their own individual decisions. Young women are for instance expected to discharge a number of tasks in the household – such as fetching water, taking care of children, preparing food, cleaning, etc. – that are time-consuming and that cannot always be performed before or after work. In addition, cultural and religious obligations – such as wedding and funeral ceremonies – play a

93 significant role in the social life of communities, and are often prioritized to work. Trainings that focus on individual time management are likely to not be successful in this context. Time management is about the role of individual within broader household economic and reproductive strategies, as well as broader community cultural and social practices.

A second issue connected to the transition to industrial life has to do with the place of origin of workers. While so far a majority of the workers and trainees are from Mekelle or its immediate surroundings, it is clear that given the magnitude of the demand of workers required by the industry, an increasing number of labourer will be sourced from neighbouring towns and rural areas. This highlights the tight link between transition to industry and migration. Evidence collected – as well as a screening of relevant literature – shows that in the context of industrialization, migratory patterns are very complex, not only unidirectional from rural to urban areas. Parallel to in-migration from rural areas, the increasing cost of living in inner urban sites produces out migration to peri urban areas. The T&G industry in Tigray is precisely developing in peri-urban settings – such as the area around Qwiha – that have the potentiality to become important industrial hub, and hence need to host an increasing number of migrant labourers. In the long term the trend is one that lead to the formation of peri-urban settlements to serve a growing and consolidated industry. The initial, short-term dynamic is characterised by frequent movements of people back and forth to their place of origin. The latter dynamic captures the current stage of industrial development around Mekelle. A good number of workers and potential employees are unlikely to relocate immediately around industrial premises, but rather prefer to keep a strong link with their place of origin, partly to discharge other economic, social, and cultural obligations, partly as a risk diversification strategy.

A third issue has to do with the transition from agriculture to industry. Interviews of workers and trainees originating in rural areas highlight that for many households industry is likely to accelerate existing trends towards the transition to a cash-based economy. This is crucial because it helps to contextualise the significance of salaried jobs for workers in the T&G industry. Rural households in Tigray rely on a combination of agricultural production for internal consumption and for the market. The ratio depends on many factors, and often on the relative wealth of the household and its ability to accumulate enough capital for strategic investments in productivity, such as fertilizers and oxen. Normally, households are wealthy when they are able to sell high value cash

94 crops such as teff, and/or have access to irrigated land for fresh vegetables. The important point emerging from interviews is that, in this context of partial and incomplete marketization of agricultural production, adding to the household income a salary from industrial work has significant implications. Rural households are normally large, and one main priority is risk diversification. While farming is normally dominated by men, women discharge other activities, which range from domestic tasks to other cash based works. In a context where the T&G industry is mainly seeking to employ young women, from a household perspective this constitutes a potential important avenue for risk diversification. For rural households, receiving a salary – no matter how low – facilitates capitalization in a context of partial and incomplete transition to cash based economy. In addition, the fact that women are being sent to work does not substantially alter the ability of the whole household to farm. From a household perspective industrialization can therefore considerably improve and sustain the creation of livelihoods.

Making a living While from a household perspective, especially in those cases where textile workers come from rural areas, a monetary salary is an important risk diversification strategy, the extent to which this has a transformative impact for young people approaching the sector is more difficult to assess. On the one hand industrial work empowers and enfranchise youth providing more autonomy and power to take decisions. On the other hand, the entry salary in the textile industry is not enough to allow for a full living. As noted by many interviewees, working in the textile industry at the current salary level makes sense only in the context of a broader household strategy. From this perspective, rather than enfranchising young people, industrial work may reproduce existing dynamics of dependence and subordination within the household and the broader community.

In a context where the cost of living is increasing sharply, current entry salary in the industry is barely sufficient to cover immediate necessities. A main cost is house rent. Assuming that a majority of the workers relocate from elsewhere to seek employment and, in many cases a full salary is barely sufficient to cover house rent and minimal subsistence expenses. This has two consequences that clearly emerge from interviews. First, work in the textile industry does not allow for any form of saving or capital accumulation unless salary is combined with other activities. Second, none of the interviewees regarded their job in the industry as a long-term strategy. This despite considering ‘industry’ and ‘industrialization’ of critical importance for their future and for the future of Tigray and Ethiopia.

Trainees and employees regarded the opportunity offered by the textile sector as short-term strategies through which acquire enough skills and move on with their life. Interviews highlight that one positive about working in the industry is that it allows time to enrol on evening classes. Many of the workers that were taking evening classes considered the work in the industry as a temporary measure that they performed while completing additional education. This highlights that work in the industry is performed only because of the lack of alternatives and without particular commitment to the future. Those interviewees that were not pursuing additional education often also regarded textile work as a temporary measure. One common aspiration was to open a small business by making the most of the skills acquired during training and work. Although it is unclear what kind of business people have in mind, this clearly reflect a short-term attitude towards industrial work. It is significant how none of the interviewees expressed the will to settle in the industry permanently. Those workers that have already been working in the industry for a long time represent a partial exception. But again, it seems that lack of alternatives, rather than genuine aspiration is the main reason motivating people to stay in the industry.

The question of salaries seems therefore central in determining short-term and long-term strategies of workers in the textile industry. One central issue is the lack of alternatives in a context where the textile sector is likely to play an important role in pushing employment creation. Youth unemployment is considered by far a more serious concern than the lack of adequate salaries. This is often synthetized by the slogan “low salary is better than no jobs”. But there is also more. Precisely because of the good reputation of industrial life, working in the textile sector is often seen as an investment for the future, rather than the satisfaction of immediate needs. Many youth see this as a necessary step to approach adult life and making a better living later on.

A further important theme connected to the question of salaries emerges from interviews with trainees. When asked about the salary expectation after they complete the training, some had no answer and just stated that they heard that the initial salary is generally low, while a vast majority had expectations that far exceed the reality. This reflects several issues. First, as industrial work is associated to a certain degree of social standing, the expectation is that salaries reflect such standards. Second, many trainees and workers believed that even basic training courses entitled them with better salaries. This is also the reason why some people decided to attend trainings despite having jobs that provided

96 them salaries that far exceed those of the industry. The perception is that textile jobs allowed levels of specialization and skills that could be useful elsewhere to get other jobs, or to claim a higher salary. More broadly, for many workers and trainees, information about salaries and their contracts were very obscure. Many workers felt that they were not entitled to raise questions and pertinent information. In the most extreme cases workers believed that contravening the stipulation of their contract was punishable by law and by the government directly.

3.5.2. Women empowerment and gender dynamics in the textile industry

A vast majority of the workers in the textile and garment industry are young women. Companies that already started production, like Velocity and MAA garment, reported that women constitute over 80% of the total workforce. This is relevant for our discussion from many different perspectives. A first dimension is that, while women constitute a vast majority of employees, these are almost entirely positions of basic operators, which means the least remunerated jobs. Men are hired for other jobs that either require physical strength or different levels of specialization. More broadly, at a basic level – and hence for a majority of the workforce – the division of labour in the textile industry mirrors a strict division of tasks between women and men. As noted in informal conversation with trainers the reason why “men are hired for printing while women for sewing is because it is difficult to keep men sitting all day”. Therefore, one important dimension about the gender dynamic in the textile industry is that the policy of hiring is based on a normative approach that attributes a priori roles to women and men. Issues about discipline and attitude towards an assembly like type of work are important initial determinants of the gender division in the industry.

To an extent, and in a broader context where youth unemployment is a main challenge, the fact that the textile industry offers job opportunities mainly to women can be regarded as progressive. Women are normally in a disadvantaged position vis-à-vis men when it comes to find employment opportunities and gain degrees of autonomy and independence. It is undeniable that the textile industry presents young women with this opportunity. But it is also true that this is to some extent a superficial reading of gender dynamics in the industry. This perspective takes into account the perspective of individuals – young women – as if their decisions were independent from the broader economic, cultural and social context within which they are immersed. As we have noted above, this is seldom the case of present day Tigray and Ethiopia in the context of the

97 transition to industrial life. In particular, there are at least three main dimensions that affect the ways in which young women are affected by industrial life. These are issues about salaries, decision making within the household and the community, and migration.

I have noted earlier that the initial salary for basic operators is very low. Anecdotal evidence suggest that entry salaries can be as little as 800-900 ETB/month, and young female workers certainly fall in this category when they first start working as basic operator. Considering the current cost of living this salary does not allow for full subsistence. This means that for young women it is very difficult – if not impossible – to start an independent life even when in theory they would be allowed to do so. Evidence collected suggest that in no case the women interviewed would have been able to sustain themselves without the direct or indirect support of relatives or other kin. The question about salaries not sustainable to make an independent living raises questions about the extent to which jobs in the textile industry provides effective women empowerment. It seems that in a good number of cases women remain bounded to original patterns of subordination and dependence with the additional burden of a workload in the industry. Must not be forgotten that women are also expected to perform a number of tasks in the household before and after they go to work that sum up to their daily workload regardless of whether they are employed in the industry or not. These include taking care of children, fetching water, preparing food, cleaning the household, etc.

In many interviews the question about childcare was an important determinant of the attitude towards work. Women that could rely on family support for taking care of children were those who were lucky enough to be based in the surrounding of the factory. Assuming that a majority of the labour force will be sourced from neighbouring localities childcare is going to constitute a very serious concerns for women workers. At least three of the interviews illustrate the matter stake. These are women that in the past had quitted their job or that were considering quitting in the future in consideration of the fact that the cost of a baby sitter is sometimes higher than the average salary earned. Evidence collected highlights that in absence of family network, women with children are likely to resign because the full cost of a helper at home is similar and sometimes higher than their salary. The same consideration applies to high levels of absenteeism and punctuality: the main reason why women were absent from or late for work is connected with the fact that they had to take care of children or other siblings. This is a particularly significant issue if we consider that workers will be increasingly sourced from neighbouring towns and people will leave behind family support.

A second issue brings into focus questions about decision-making practices. I noted earlier how in the context of relatively poor households, decisions are very unlikely taken by individuals, but fall within broader and more complex strategies. To put it simple, where income generation is not enough to sustain individual livelihoods, decision-making strategies have the household as the central term of reference. This also explains why large households are prevalent in these contexts. Risk diversification becomes an imperative, especially for households that rely on agriculture as a primary source of living. We have seen how in such a context adding an extra cash income through the employment of one or more young women can constitute an important risk diversification strategy. It guarantees some cash to the household, without jeopardizing its ability to perform the bulk of agricultural activities.

While from a household perspective, especially in those cases where textile workers come from rural areas, a monetary salary is an important risk diversification strategy, the extent to which this has a transformative impact for young women approaching the sector is more controversial. On the one hand industrial work empowers and enfranchise women, providing more autonomy and power to take autonomous decisions. On the other hand, entry level salaries make for a sustainable living only in the context of a broader household strategy. From this perspective, rather than enfranchising young women, industrial work may reproduce existing dynamics of dependence and subordination within the household and the broader community.

These issues highlight that in the current context of transition to industrial life income generating strategies are complex and determined by the overlapping of multiple rationalities. Young women approaching the industrial life are in midst of complex decision making processes that are far beyond their own individual will. The household and the broader community where they live are important determinant of their degree of commitment to industrial work, whether they will show up in time, and whether they will have to prioritize other commitments or not. The rationality of young women approaching the industry should be regarded against these complex decision-making processes in which aspirations to a better future are balanced against immediate needs, a changing reality of the local and national economy, as well as existing social and economic hierarchies that relegate them at the margins.

Trainings – and workers-companies relationships more broadly – need to take into account these complex dynamics if a mutually beneficial environment is to be built. Understanding these issues, and incorporating them in industrial and human resources planning, can have a positive impact in terms of increased productivity of labour, while providing young women with the means to build a better future for themselves and the generations to come.

As emerged in a roundtable discussion with industrial and local government stakeholders, the current turn to industrialization in Tigray is not about focusing on short-term, immediate matters, but it is about envisioning the future of Ethiopia. Trainings and development activities – and the resulting benefit for young women – will be successful only if they take a long-term perspective. As noted by one of the participants “building a sustainable future is about thinking how we want to see Mekelle, Tigray and Ethiopia not in two but in thirty years”.

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4. Project Action Plan

In order to formulate the project’s action plan, during the inception phase the UNIDO staff has conducted a number of preliminary meetings with local public institutions, Mekelle University institutes, and private sector actors. Following a PPP methodology, these preliminary meetings were meant to establish a network stakeholders willing to contribute to different extents to the establishment of the Centre of Excellence for training development in Mekelle. The involvement of private sector actors was of particular importance due to the need to design training programmes that take into account the requirements of the industry. One of the main gaps identified was indeed that existing training programmes do not provide workers with skills that meet the demand of prospective employers. In other words, establishing a network of stakeholders able to design effective demand-driven trainings was a central undertaking of the inception phase. While all the major textile and garment industrial producers were approached, the following table provides a list of those companies who finally committed to participate in roundtable discussions and to provide a contribution to establish the Centre of Excellence for skill development. In addition, for the purpose of developing high level trainings for the top management, the Institute of Science and Technology of Mekelle University was involved in the discussion and preparation of the training modules.

Organization Contact person Email H&M Bezait Amare [email protected] Velocity Tefetawit Gebremedhin training.eth@vogue- intl.com DBL Libelo Gebreselassie [email protected]

Strathmore Trading Sanjeeva Iperluma [email protected] (Ananta Group)

MAA garment Abebe Girmay [email protected]

College of Science and Ashenafi Aregawi [email protected] Technology (Mekelle University)

For the purpose of the inception phase, the discussion with these private stakeholders – a majority of whom is in the process of starting their operations, and hence to seek employable work force – was motivated by two objectives. The first was to collect data

101 and evidence of how many workers, and the relative levels of specialization, major actors in the T&G industry are going seek to employ in the next few years. The second was to draft training manuals to be adopted in the Centre of Excellence that are formulated based on the demands of the industry, and that could constitute the basis of the UNIDO project’s Action Plan.

After individual meetings with public and private stakeholders, two consecutive public- private roundtables were held in Mekelle in December 2017 and January 2018 respectively. The aim of the first roundtable was to discuss initial commitment of the companies as well as to address the main gaps affecting the labour relations in the industry. The discussion was focused on how to design an effective Centre of Excellence for skill development that would take into account existing shortcomings. The second roundtable was convened to discuss draft contents of training manuals on the four main topics about technical skills for basic operators; technical skills for middle management; training course for top management; training course for soft skill development. The manuals for each subject are enclosed to this report as Annexes.

Another major undertaking of the inception phase was to find potential institutions willing, and with the capacity to host the Centre of Excellence. While several location were visited, the ideal conditions were found at the Mekelle Garment College, the public TVET for the sector that has also been targeted nationally by the Ministry of Education as a priority institute were to establish a Centre of Excellence. All the private and public stakeholders interviewed also agreed that the College potentially offers ideal conditions for hosting the training centre of the UNIDO project. As discussed in the following sections, the Centre is endowed with new workshop that are currently idle and that can be used to establish the Centre of Excellence. The management of the College and all the relevant government offices expressed enthusiasm in potentially having the UNIDO Centre of Excellence hosted in the premises of the Mekelle Garment College.

The following sections will present the profile of the Mekelle Garment College (the recommended site to host the Centre of Excellence), the details addressed at the two PP roundtables; the profile of the industrial actors involved; recommendations to formulate one year timeline at the Centre of Excellence; and a tentative list of machinery required to equip the workshops.

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4.1. Site selection for the Centre of Excellence

During the inception phase other possible locations were considered and investigated to host the Centre for Excellence. However, after thorough review the Mekelle Garment College (MGC) was selected for the following reasons:

 Strategic Location: MGC is located in Mekelle and is in close proximity to the Industrial Park where the majority of the Tigray T&G workforce will be based.  Public (TVET) Institution: TVET Institutions are crucial to the overall framework of national development. Working with public institutions helps facilitate and strengthen existing TVET centres to provide skill development and job opportunities for the local workforce.  Facility and Resources: The facility is one of the few in the region capable of hosting trainings for 300+ trainees at one time and provide classes for the training of middle and senior management.  Government Approval: The MGC was selected by the Ministry of Education as a one of the TVET of eligible to become Centre for Excellence.

4.1.1. Mekelle Garment College Profile

Established in 2002, Mekelle Garment College (MGC) did not begin its formal activity as TVET until 2008. The College has been identified by the Ministry of Education as one of the priority institutions where to develop a Centre of Excellence. Currently, there are two courses operating out of the Garment Department: 1) Apparel Design and Technology (4 years) 108 students began enrolment in 2017; 2) Advanced Apparel Production (3 years)- 42 students began enrolment in 2017. Both courses include on-the-job training and education. The College boasts adequate equipment and facilities. The Garment Department has 6 workshops, including 1 Pattern Lab, and 5 Garment Technology Labs. Additionally, MGC has one Production Unit working in collaboration of DBL Group.

MGC has a range of equipment suitable to produce a variety of products. Currently, the Production Unit professionally manufactures t-shirts for distribution. The facilities have adequate classrooms to host soft-skill trainings. MGC has adequate industry software, and while lacking appropriate software standard in the Garment Industry, plan to equip the facility with new technology. Additionally, the library is currently without internet access.

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4.1.2. The college current capacity

The table below refers to short-term trainings provided in 2016-2017. Trainings were conducted for one month on technical skills. The age of the graduates is 18-25 years old. The aggregate data (1731) refers the current capacity of the college to provide trainings over the course of one year.

Occupation Degree TVET Certificate

m F Total m F Total m F Total Garment 20 23 43 65 141 206 131 187 318

Total 20 23 43 65 141 206 131 187 318

Occupation Grade 10 Under Grade 10 Total

m F Total m F Total m F Total Garment 278 823 1101 40 125 165 433 1298 1731

Total 278 823 1101 40 125 165 433 1298 1731

The table below refers to short-term trainings on soft skills (July-August 2017) conducted in Mekelle. Out of 4200 enrolled in the training, 3802 passed the course and were selected for the industrial park as potential candidates or employees. The age of the graduates are from 18-25 years old only as per the need of the industry.

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Occupation Graduates Remark

m F Total Basic garment operation 214 3588 3802 All are above grade 8th Total 214 3588 3802

4.3.3. Information about machineries

SL Machine Type Model Qty Functional Non Remark Functional 1 Cutting and spreading table (if 0 available also in automatic) 2 Automatic knifes -band knife 0 0 Round knife 1 1 Stand knife 1 1 3 CAD system for pattern and 0 0 layer making 4 Iron vacuum tables 4 – 5 3 5 4 -5 monitors for the trainings 1 (projector ) 6 Industrial single needle lock 211 170 41 motor stitch sewing machine and spare (light/medium weight fabric) p/m 7 Industrial two needle five and 20 17 03 motor three thread safty stitch over and spare lock machine p/m 8 Three needle, five thread 3 3 cylindrical interlock m/c 9 Three needle, five thread flat 4 4 bed interlock m/c 10 Industrial double needle lock 10 10 stitch machine organize split needle bar 11 Two needle feet of the arm 10 10

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machine 12 Button hole m/c 3 3 13 Bar tacking machine 1 1 14 Industrial single needle lock 4 3 1 motor and stitch button attaching machine spare p/m 15 Straight knife cutting machine 1 1 motor and spare p/m 16 Ironing unit with irons, boards 3 3 and movable boiler

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4.1.4. Master plan of the available workshops A separate version is also available in .dwg format.

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4.2. First Public-Private Roundtable discussion

A Public-Private Roundtable on skill development in the Tigray Textile Sector took place in Mekelle on December 12th 2018. The roundtable brought together major industrial partners and public institutions. The industrial partners that attended are the following: H&M, Velocity, DBL, Strathmore Trading, and MAA garment. Representatives of public institutions included the ETIDI, the TVET Tigray bureau, the Mekelle Garment College, the Industrial Park Development Corporation (IPDC), and the Ethiopian Institute of Technology (EIT) of Mekelle University. A main follow-up to the roundtable was the organization of a second, more technical roundtable to discuss and formulate skill development manuals.

The roundtable discussion was organized around two main aspects of skill development in the T&G industry: soft skills and technical skills. As far as soft skills are concerned all the stakeholders agreed that this is by far a main challenge hindering the productivity of the industry. The discussion highlighted that there is need of skill development initiatives that acquaint the workers with the industrial culture, including how to behave on a factory setting, time management, industrial psychology, and health & safety regulations. It was stressed that soft skill initiatives must involve not only basic operators but also line supervisors, middle management, as well as managers. In addition, it was recognised that soft skill development cannot be dealt with in isolation from the social and cultural background of the workers. This also mirrors the evidence of the qualitative assessment presented in previous sections. Initiatives have to take into account the very context where workers come from, including issues about transition from agriculture to industrial life, as well as gender dynamics. For this reason it was suggested that complementary soft skill development initiatives must be thought in a way that involves the broader communities where the workers come from. Finally, in order to maximise the benefits of industrial development in the country there is need to think at soft skill development as part of a broader effort to build the future of Mekelle, Tigray, and Ethiopia, and not merely as initiatives that aim to create employment in the short term.

The discussion about technical skill development was equally productive. The general principle that was agreed upon was about a dual step training, part to be conducted in the training centre and part directly in the factory. The roundtable recognised the importance of developing appropriate training manuals effectively. A point that was stressed with vigour is that the formulation of Curricula must start from the demands and

109 be driven by the private sector. It was also acknowledged that effective trainings are required for both basic operators and middle management. As part of the project, some activities will necessarily have to focus on Training of Trainers (ToTs). This is important to assure technology transfer in the long run, and can be achieved by involving international experts. Another arrangement to assure a continual and effective training programme is to think at options that involve trainers of the Centre of Excellence to follow up with training initiatives in the factories.

A separate set of issues was raised for the potential training of managers. It was agreed upon that initiatives in this field should be framed around synergies between the University of Mekelle and the Centre of Excellence. Training of managers is strategic for ensuring the project’s sustainability in the long run, as well as generating lasting change in the structure of the local and national economy.

All the private sector actors except Velocity expressed an interest to develop both soft and technical skill training initiatives. Velocity expressed an interest in collaborating in regard to the soft skills component only. It was agreed upon that the formulation of each training component is to be led by one or more of the companies, depending on the interests manifested during discussion. H&M committed to play a broader role of coordination and intellectual contribution to each of the components.

The table below summarizes the outcome of such discussion:

Soft Skill development Technical Skill development Basic Operators Led by Velocity Led by Strathmore Trading and MAA garment Middle Management Led by Velocity Led by DBL

Managers Led by Mekelle University and H&M

Each stakeholder committed to prepare a draft of the modules for the segments it is acting as leader and to send an expert to discuss and finalize contents at the following technical roundtable.

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List of participants to the roundtable

Name of participants Organization Tel number 1 Getahun Legesse Mekelle Garment College +251(0)913-380837 2 Akari Yamamoto JICA +251(0)924-484921 3 Delo Benka ETIDI +251(0)911-917308 4 Goitom Gebrekidan MIP +251(0)914-732657 5 Tefetawit Gemedhin Velocity +251(0)914-013349 6 Sawrabe Verma H&M +251(0)966-269350 7 Sanjeeva Ileperuma Strathmore Trading +251(0)975-273283 8 Bezait Amare H&M +251(0)966-269351 9 Dr. Kinfe Tsegay Mekelle university +251(0)914-706550 10 Abraha Haile Mekelle University +251(0)914-756095 11 Meressa Abraha DBL +251(0)944-248024 12 Asfaw Girmay DBL +251(0)914-746730 13 Libelo G/slassie DBL +251(0)914-301963 14 Abebe Girmay MAA Garment +251(0)914-003953 15 Dr. Mulugeta Hadis Tigray TVET +251(0)912-121282 16 Tsegabu Teka UNIDO +251(0)914-705057 17 Filmon lebelo UNIDO +251(0)920-791948 18 Samson Baraki UNIDO +251(0)911-487149 19 Davide Chinigò UNIDO +251(0)929-135705

4.3. Second Public-Private Roundtable discussion

The second technical roundtable was held in Mekelle on January 23rd 2018. The roundtable brought together major industrial partners, along with representatives of local government offices, as well as of the national ETIDI and the Technology Institute of Mekelle University. The discussion was organized along 4 main topics: technical skill development for basic operators, technical skill development for middle management, skill development for managers, and soft skill development. In each case one or more of the stakeholders presented their inputs based on the preference expressed during the previous roundtable. The discussion focused on draft documents of manuals to be adopted in the Centre of Excellence, and as the basis for developing the Textile Project’s action plan and timeline.

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On the topic of technical skills for basic operators MAA garment and Strathmore Trading offered a joint presentation. DBL provided a presentation of a draft document on middle management. The morning session was concluded by a presentation by the Technology Institute of Mekelle University on a handbook for the training of managers. The afternoon session focused on the topic of soft skills development, with presentations offered by ETIDI, MAA garment, and H&M. Presentations were followed by extensive group discussion. Comments served the purpose to amend the original draft documents. Each stakeholder committed to integrate comments into the initial draft and share the revised documents to the broader group for a final round of feedback.

The following sections will provide a detailed account of the discussion for each of the four topics. In line with the previous roundtable, a general consensus emerged about thinking at the Centre of Excellence not as a static training centre, but rather as a dynamic, flexible, and adaptable platform to provide a wide set of trainings depending on the demand of the industry and the market of the time. The demand- driven feature of the modules and the curricula to be offered at the Centre is a main strength that stakeholders kept emphasising. The Centre is expected to work as a platform hosting the most innovative ideas about how better to perform trainings at a certain point of maturity of the industry and the job market in the area of Mekelle, and in Ethiopia more broadly. The structure of the job market will change over time, and the Centre of Excellence will have to be able to adapt accordingly by providing trainings that are effective to meet a rapid pattern of change. While it was general understanding that currently the needs for basic operators and middle management staff is the most pressing, the nature of the industry is going to change as more people get trained, and increasing levels of specialisation and diversification are achieved.

For these reasons, it was general understanding of the stakeholders involved that a modular approach to the project means that the contents discussed for each training curriculum will constitute only the initial basis of what will be offered at the Centre of Excellence. Over time modules and curricula will have to meet the demands of a changing industry, and/or address specific requirements of specific industrial actors, who commit to lead on the initiation of a new module. Being a public institute the Mekelle Garment College will benefit from increased capacity of its staff and its structure.

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List of participants

S/N Name of participants Organization Email address 1 Getahun Legesse Mekelle garment center [email protected] 2 Delo Benka ETIDI [email protected] 3 Genet Measha Tigray ReSMMIDA 0914701013 4 Jennifer Lembe GIZ STEP/EIT-U [email protected] 0929499103 5 Janaka Atapalty STRATHMORE PLC [email protected] 6 Bezait Amare H&M [email protected] 7 Dr. Kinfe Tsegay Mekelle university [email protected] 8 Ashenafi G/kidan MAA Garment [email protected] 0914150680 9 Meressa Abraha DBL Meressa.abraha@dbl- group.com 10 Libelo G/slassie DBL [email protected] 11 Asfaw Girmay DBL [email protected] 12 Abebe Girmay MAA Garment [email protected] 13 Kedir Abederahaman Tigray TVET [email protected] 0914210152 14 Wondwosen Zeleke H&M [email protected] 0912051537 15 Gebrehiwot Assefa Mekelle Industry Park 16 Davide Chinigo’ UNIDO [email protected] 17 Tsegabu Teka UNIDO [email protected]

4.3.1. Technical skills for basic operators

Mr. Ashenafi G/kidan from MAA garment h presented a draft module of technical skill for basic operators. MAA garment and STRATHMORE Trading PLC jointly developed the contents of the presentation. The presentation focused on the following major areas:

 Selection criteria For Sewing trainees (using Peg Board Test , Color blindness and Visual Dexterity)  The contents training discussed include the following:

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a. Naming Sewing Machine Parts b. Knowledge of the types of Needles, Threads, and Fabrics c. Knowledge about the Sewing Machine d. Ergonomics e. Starting Technical Training with Paper Exercise f. Understanding Sewing Operation g. Understanding of Different Stitch Types h. Sewing Defects i. Work Area Maintenance

 The duration of the training module is estimated in 45 working days.

Comments and Q&A All the participants of the workshop appreciated the presentation of the draft training module by MAA garment and STRATHMORE Trading PLC, which was judged of very good quality. Comments focused on issues that the participants felt were missing, and that needed to be incorporated. These include the following:

 More attention on Occupational Health and Safety;  A closer attention to buyer’s needs;  The participants agreed on the importance to provide technical skill training side by side with soft skill training. A main outcome of the discussion was that marking a line between the two is often very difficult, and that they should be provided in an integrated way, because they are complementary in reality. Issues raised for instance included awareness about taxation and salaries; conflict management and absenteeism; team work and behaviour on the assembly line;  Another question addressed in the discussion was about trainings that require special machineries. This was raised particularly by Strathmore Trading, as the company project to produce mainly sweaters and suites, and basic workers will need to be given training on particular machineries. The outcome of the discussion emphasised that the Centre of Excellence should be built through a modular approach. This means that while general trainings can be provided to all the workers, companies that require specific training on specific machineries can coordinate and lead on the preparation of these modules and provide their input in terms of human capacity and machinery requirement.

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 A modular approach will allow establishing a Centre of Excellence that provides different operations for workers at basic level. One way to do that is by establishing advanced modules for basic operators – for instance on pressing, spreading and cutting – in a way that meets the demand of the industry. H&M remarked that having different modules in such a way is what makes the difference between a normal training centre and a Centre of Excellence. To be successful the Centre of Excellence has to be able to respond to the question not only about what kind of trainings the industry of the present needs, but also the industry of the future. Having a long-term perspective means focusing not only of the priority of the industry today, but on the potential challenges of the industry of the future.

4.3.2. Technical skills for middle management

The course curriculum for training of middle management was presented by Mr. Meressa Abraha, DBL group. The manual is organized along 8 modules, each one to be taken over the course of two weeks (84 hours). The final manual will also include the equipment list required to run the modules. The manual included the following modules:

 Production floor supervisors  Merchandising, Sampling and Planning  Pattern making and CAD system  Marker, Spreading and Cutting  Industrial Engineering- I.E.  Quality control, Lab Test, Washing, Finishing and packing, Ware housing  Maintenance  Common modules (soft skills)

Main points addressed during the presentation are the following: to create job opportunities immediately after the training; what should be the trainees minimum entry level; how to source qualified trainers; the media and language of trainings.

Comments and Q&A The overall feedback over the module was positive, and suggestions for improving the manual were the following:

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 Adding cost consciousness practices; waste management training; Health and Safety component; a component of mechanical engineering to be added in maintenance module.  A more general point that was raised is about workforce management, or what was referred to as “human interaction”. Middle management staff needs critical leadership skills that allow them to understand and manage the operators they supervise. For instance, these include conflict management and communication skills. For this reason, the discussion emphasised that these is need for more articulated and longer middle management training modules. Leadership and communication skills are something that cannot be trained over the course of two weeks only.  The previous point brought the conversation to broader issues about how to define middle management. The entry level of middle management staff should require people with a degree form the university and at least one year of work experience.

The conversation then shifted to how to translate these principles into practice, especially in relation to the Centre of Excellence. Options suggested are the following:

 Trainees can be workers already employed in one company and that are selected for middle management trainings to be undertaken at the Centre of Excellence;  Another option is to provide for paid in-factory internships of university students about the work culture of the industry;  Middle management training needs to be tailored on the specific requirement of each company. For this reason, the Centre of Excellence can provide a more general module, while specific companies can led more specialised courses. This once again follows the principle of the modular approach highlighted before.

Another important issue is to create connections with universities that provide courses on Textile and Garment. It was highlighted that the country has already 6 universities providing such trainings, although Mekelle University is not yet among these. There is a course that started to be provided but it is still at an early stage. The Centre of Excellence should favour the integration of modules for internship programmes with the universities that run garment programmes.

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The question about where to source prospective trainees raised the broader point about how to establish connections between the Centre of Excellence and other institutions. The following suggestions were provided:

 Establish links with the Career Centre of Mekelle University;  Linking the Centre of Excellence with the web platform EthioJobs;  Disseminate information about the Centre of Excellence through job fairs;  Strengthening the connection with other donors and international organizations working on similar projects such as GIZ, DFID, World Bank, etc.;  ETIDI runs a national database of graduates and a placement programme from textile and garment institutes that can be shared with the Centre of Excellence.

A further point that was raised was again about the Centre of Excellence being informed by a modular approach. While general modules can be provided at the Centre of Excellence, product specific modules that need specific machineries/skills will be provided in each factory.

A final point discussed is about what kind of certification trainees will obtain upon attending courses at the Centre of Excellence. It was agreed that while in the long run efforts to streamline curricula into the public system (TVET) will be pursued, in the short term the Centre can issue Private Certification that draw on the reputation of the consortium of companies and institutions running it.

4.3.3. Training for managers

A draft module for the training of managers was prepared and presented by Dr. Kinfe Tsegay from the Technology Institute of Mekelle University. The draft module presentation focused on the following major topics:

 Broad introduction and global trends of the textile sector  Key challenges of the sector in Ethiopia  Possible solution and directions

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 Key skills for managers include strategic thinking, collaboration, emotional intelligence, critical thinking, communication, coaching, making values visible and viral.  The proposed modules are the following: a. Problem solving and decision making b. Team building and management c. Negotiation skills d. Strategic leadership e. Project and risk management f. Marketing management g. Quality management h. Time and self-management  Training schedule (estimated 18 days for all modules)

Comments and Q&A While the presentation was well received by participants, the discussion focused on questions about the duration of training, target trainees and trainers, and synergies between the Centre of Excellence, University and the private sector. Once central point is to design trainings that make use of non-traditional, interactive methodologies, such as approaches based on case studies, exposure sharing, scenario planning, and sharing of experiences. Participants felt that managers require trainings also on issues about customer handling and global scenario of the sector. Discussion focused on the following issues:

 Trainings should focus on practices of knowledge transfer and experience sharing. A central question for the training of managers is to make the most of the expertise of international companies that have a global outlook of the sector. One connected question is to address with trainings is the cultural gap between locals and foreigners. Trainings should address questions about understanding of different cultures on communication and interpersonal skills.  Another question addressed is about who should, and has the capacity, to deliver trainings for managers. The debate here was between those who privileged trainers with more practical experience of management in the sector (this view was mainly supported by the private sector) and trainers with theoretical experience. It was agreed that an ideal course should involve a combination of both.

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 General trainings can be provided in collaboration with the university, other trainings by invited guests sourced through the international companies. The general understanding is that there should be a tandem between academics and practitioners in the provision of trainings for managers.  Connected is the question about budget and costs of high-level trainings. As international experts might require significant budget, one option is to make the most of international experts that pay visit to international companies for other business reasons and ask them to provide a training session while in the country.  Expensive is also buying time of managers for further training. For instance it was noted that no company could afford to send a top manager for training for 18 consecutive days. For this reason, trainings should be flexible and organized in the form of seminars that will take place once a certain number of people enroll. More broadly, the question of time requires a modular organization of trainings. For instance, it was emphasised the importance of providing trainings to staff already employed to update and upgrade skills and knowledge over specific topics.  One other question raised is whether trainings for managers are a task that goes beyond the scope of the Centre of Excellence. In such regard, the role of the Centre should be to facilitate and coordinate trainings that are mainly provided by the University and Private companies.  Modules for the training of managers are perhaps those that require most flexibility and be delivered on a demand-driven basis. Requirements need to be set by the industry, and will change over time depending on the state of maturity of the sector.

4.3.4. Soft skills training

The soft skill training component was presented by Mr. Delo Benka from ETIDI, Mr. Abebe Girmay from MAA garment, and Ms. Bezait Amare from H&M.

Mr. Delo presented the soft skill training manual developed by ETIDI which is currently used for trainings of workers in Hawassa Industrial Park. The handbook encompasses 7 modules:

 Personality Development  Group dynamics and Team Building

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 Value of Time and Time Management  Personal Finance  Communication in Organization  Value and workplace Ethics  Workplace safety and Hygiene

Mr. Abebe addressed questions of soft skills training from the perspective of existing legislation, and the labour law more specifically. The presentation focused on the following points:

 Definition of different terms (work rules and working conditions)  Contract of employment  Probation period (45 days)  Obligation of the parties  Unlawful activities  Termination of contract of employment  Minimum work conditions  Special leaves  Occupational safety & health  Additional information HIV/AIDS issues, personal hygiene

Ms. Bezait presented a less conventional approach to soft skills training, whose rationale is that soft skills are about an intercultural exchange that entails several layers of social mediation. Conventional soft skills trainings are about changing the mentality of people in order to prepare them to work in the factory. The approach suggested by H&M is that soft skills trainings should take into account the cultural background, as well as the social and economic baseline of the communities where prospective workers come from. For this reason Ms Bezait proposed an approach to training whereby the “Centre of Excellence goes to the communities” and not only vice versa. The starting point was expressed through the following diagram, explaining the tripartite interaction between the Industry, the Centre of Excellence and the Local Communities where workers are sources:

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Based on past experiences of H&M, the rationale of the suggested approach is to design trainings whereby the Centre of Excellence performs trainings directly in the communities where a majority of workers come from, and finds culturally appropriated ways to perform soft skills trainings, that take into account local social and economic specificities. From a practical perspective this approach can be implemented through the following:

 Gatekeepers approach. Focus on some influential people in the workforce. They are targeted with trainings and then they are asked to share their experience with the rest of workers (for instance what does it means to be punctual and to work on an assembly line). These are neither managers nor supervisors; these are normal workers sharing their experience. They are selected on the basis of their leadership and charismatic skills as potential social/cultural influencer of other workers.  Mobile trainings. Some general training can be performed directly in the communities where a majority of workers come from. Mobile trainings can tackle the problem about wrongful and incorrect information about the industry that are sourced by word of mouth.  Voluntary Social Engagement. This approach stems from understanding the engagement of local communities as based on their social and economic needs, rather than based on the needs of the industry. Very often workers do not respect basi behavioural rules – such as punctuality and absenteeism – because of other social, cultural, and economic obligations they have to perform in their own communities. This is particularly significant for women, who within their household are expected to fulfil a number of other tasks, including domestic work, childcare, etc. Voluntary Social Engagement approach is based on the premises to discuss these issues and potential solution with the local communities directly, as

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a way to find socially acceptable solutions that take into account the needs of the industry and of the local communities.  Using Media. Information about the industry can be disseminated through local media. Radio is the most accessible and common example. The goal is to reach out the communities through selected awareness campaigns about the implications of the industrial life.

Comments and Q&A The discussion focused on the following points:  Soft skills training should be applied at all levels of the career ladder, and planned as part of an integrated approach to Career Development for workers.  Soft skills training needs to take into account general laws and legislations as well as policies of the specific factories.  For managers and middle management, questions about emotional intelligence, should be central components of soft skills trainings  The manual presented by ETIDI is a good starting point for providing general soft skills training courses at the Centre of Excellence. Nonetheless, a “classroom approach” to training is not enough. It is important to think at soft skills training by going beyond traditional methods. Non-conventional methodologies, such as those suggested by H&M and by Mekelle University for managers, are equally important. One other example is having motivational talks.  Soft skills development is a learning process that entails a mutual understanding between the industry and the society. If it is necessary for the private sector that the culture of the people adapt to the requirement of industrial life, this should be done in such a way that take into consideration the cultural, social and economic needs of local communities. This means that the private sectors should adapt and tailor strategies of labour enrolment to the needs and requirement of society. Soft skills training operates on two parallel levels: changing the culture of people, and adapting to the culture of the people.  One approach to “change the culture of the private sector” is designing specific soft skills trainings for middle management and managers that encompass strategies to manage the workforce in a culturally appropriate manner.  Soft skills trainings have to take into account broader structural issues at play in the Ethiopian society, such as the transition from agriculture to industrial life.

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 Strong relationship between the government and the private sector is very important to provide sound soft skills trainings.

4.4. Profile of the stakeholders engaged to establish the Centre of Excellence

Following a Public-Private Partnership (PPPs) methodology, during the inception phase the UNIDO staff engaged with a number of stakeholders at different levels. In addition to the Italian Agency for Development Cooperation (AICS) in Ethiopia, these include:

While formal and informal discussion took place with all these actors, the following sections provide details of those stakeholders that actively participated in the two roundtable discussions for the formulation of the project’s action plan and the curricula for the Centre of Excellence. The Mekelle Garment College is not included here because details have been provided in earlier sections. The following sections pay particular attention to the private sector actors involved.

The private companies were asked to provide details about their employment plan for the coming years, as well as information about trainings. Taking the labour demand of the four big companies involved in the roundtable discussions, the industry is expected to hire over 30,000 new workers in the next few years. This is a very conservative figure

123 because it accounts for a non-exhaustive list of the textile and garment actors currently or in the process of operating around Mekelle, and does not include potentially connected and spin-off sectors. This clearly highlights the criticality and timeliness of UNIDO intervention.

4.4.1. ETIDI

The Ethiopia Textile Industry Development Institute (ETIDI) is a key partner in envisioning and developing the Centre of Excellence in Mekelle. The mission and expertise of the Institute makes it the natural and ideal governmental partner to implement the UNIDO project, together and in close collaboration with the Ministry of Industry. In particular, the expertise and the national reach of ETIDI is critically important to develop a Centre of Excellence that become a Best Practice to implement elsewhere in the country. ETIDI staff contributed substantially to the discussion during the two public-private roundtables in Mekelle, and was instrumental in providing the project with a soft skill training manual. At a broader level, the Director of the Institute, Ato Seleshi Lemma, played an invaluable advisory role during periodical meetings that took place at the Ministry of Industry, at the presence of his Excellency Ato Bogale Felleke.

ETIDI was established by the Ethiopian Council of Ministers in 2010 in an effort to achieve the Ethiopian Government’s five year strategic Growth and Transformation Plan (GTP1). The Institute is meant to provide continuous support to the development of the T&G sector, which is a central component in Ethiopia’s Industrial Development Strategy. ETIDI is instrumental in facilitating the large-scale development of infrastructure to increase competiveness in the T&G sector. By supporting public and private partnerships ETIDI establishes and executes strategic initiatives to stimulate the cotton, textile and apparel industries in Ethiopia. ETIDI helps build international collaboration for capacity building in order to establish Ethiopia as an international standard in the T&G industry.

ETIDI’s mandate is far reaching and includes promoting foreign investment, secure workforce training, research and development and offering market support. The Institute aims to better facilitate the global competitiveness of the Ethiopian textile industry. Overall the Institute conducts market studies and circulates data, advises investors, provides technical support to enterprises, offers services for quality monitoring, helps streamline waste-water treatment, in addition to establishing growth in the textile and

124 garment sector. Due to the intensive labour requirements of the T&C sector the ETIDI is tasked with creating a skilled workforce by providing trainings and education.

Personnel contacted during the inception phase:

Seleshi Lemma [email protected] +251(0)114391990 Yared Mesfin [email protected] +251(0)911466981 Delo Benka [email protected] +251(0)911917308

4.4.2. H&M

H&M has been instrumental in developing and formulating the UNIDO project from the very beginning. Initial contact with the company were taken by UNIDO at the time of the inception phase for the SINCE project. At that time already emerged the willingness in embarking on a project to support the development of skills for the growing industry. A more formal meeting between, among others, H&M, UNIDO, and GIZ was held in Mekelle in February 2017. The meeting highlighted the need to develop training programmes at different levels (e.g. basic operators, middle management, managers) through strategic partnerships between industrial actors, government institutions, and international organizations. Since then H&M has been a central pillar of the UNIDO project, also for its ability to converge the interest of a number of production companies in the area of Mekelle.

H&M offered support to coordinate training activities at different levels, and its staff played a very important role during the two roundtables organized in December 2017 and January 2018. H&M staff was particularly committed to design non-conventional soft skill training activities that take into account the deeper cultural and social underpinnings of trainees and prospective workers in the industry. Details about non-conventional skill training are discussed in the Recommendation section of this Report.

The Swedish retailor has invested in the Ethiopian garment industry, sourcing products from numerous Ethiopian manufacturers including DBL and MAA garment. H&M has secured multiple production sources in Ethiopia and works with numerous independent suppliers. With 80% of production sourced by Asian producers the incorporation of Ethiopia marks an important supply shift for the retailor. Of the producers operating out

125 of Ethiopia H&M has expressed the firmest commitment to DBL, committing to becoming a long-term buyer and supporting the factor with knowledge in sustainable textile production.

Personnel contacted during the inception phase:

Bezait Amare [email protected] +251(0)947690668 Sawrabe Verma [email protected] +251(0)966269350 Pierre Borjesson [email protected] +251(0)966269349

4.4.3. DBL

DBL has been instrumental to the inception phase of the UNIDO project in a number of regards. The company led the development of a training curriculum for middle management and the staff made a substantial contribution to both roundtable discussions. The manual has been included as annex to this Report. In addition, DBL was instrumental in facilitating UNIDO staff to conduct interviews with trainees at the Qwiha training centre for the in-depth qualitative assessment.

DBL is an international Textile & Garment group with headquarters in Bangladesh. In Ethiopia the Group committed an investment of 100 million USD.6 At the time of this writing the Group was not yet operational in Ethiopia. DBL is planning to complete the construction of the factory in the course of 2018, and operations are planned over two phases. Phase 1 encompasses operations on Ready Made Garment (RMG), Printing and Accessory. Phase 2 will add Dyeing and Knitting to the production cycle. When the company will reach full capacity the number of employees will reach approximately 12,000. Below are reported details about the hiring plan for the next three years.

Currently employed by DBL

Age Gender Education

Male Female MSC/MBA/ Diploma 12th /10th BSC/BA (Technical Grade School & complete

6 http://www.thedailystar.net/business/dbl-group-set-100m-garment-factory-ethiopia-1229974 126

College and below Diploma) 20-43 24 12 11 4 11

Three years workforce plans Over the course of the next three years the company plans to employ approximately 5,300 new workers.

1st Phase RMG Printing Accessory 2551 1043 310

1st phase disaggregated by qualification Unit Managers Middle Other staffs Operator Managers Printing 9 5 22 203 RMG 35 41 69 2406 Accessory 18 28 23 974

2nd Phase Dyeing Knitting 926 471

2nd phase disaggregated by qualification Unit Managers Middle Other staffs Operator Managers Dyeing 17 21 65 823 Knitting 4 8 62 377

Training plan Since June 2017 DBL is providing trainings for Sewing and Printing operators in collaboration with the Mekelle Garment College at the Qwiha sub city workshop, and by December 2017, 920 sewing & printing operators have been trained.

Further details about the training of the workforce for the next year are the following:

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DBL developed course Curriculum and schedule for Knitwear Industry Garments and Machine Operation. The duration of this course is 192 Hours (1 Month and 24 days).

DBL is committed to provide a substantial contribution to the Centre of Excellence. DBL suggests that “experienced Sewing trainers and technicians, Garmenting, textile and Industrial engineers are required to run the Centre of Excellence. And, DBL industries will be in continuous relation in developing the training curriculum and supporting Skill Full Trainer at the right time when needed.”

The company expectation “is that the Centre of Excellence will include all facilities needed so that all graduated trainees are able to have thorough knowledge on textile and textile materials, machinery used in the Knitwear, Machine control, identified relevant trims and accessories- fabrics, needle types, stitch types, garments process, work knowledge, self-assessment, sewing different process and styles of knit garments”.

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Personnel contacted during the inception phase:

Mahmudul Hasan [email protected] +251(0)936011709 Libelo Gebreselassie [email protected] +251(0)914301963 Meressa Abraha [email protected] +251(0)944-248024 Asfaw Girmay [email protected] +251(0)914-746730

4.4.4. Strathmore

Although Strathmore started to establish its presence in Mekelle during the inception phase of the project, the company committed to participate to the two roundtables organized in December and January. Strathmore provided a substantial contribution to the formulation of the technical skills for basic operators manual. The manual has been included as annex to this Report. The company has a deep interest in skill training, and committed to support the establishment of the Centre of Excellence.

Strathmore is a controlled company of the Bangladesh based Ananta Group. Strathmore is the only company involved in the UNIDO project that will operate inside the premises of the Mekelle Industrial Park. The company rents over 70% of the total space currently available in the Industrial Park (8 of the 12 sheds). To set up its state-of-the-art manufacturing project in Mekelle Industrial Park, Strathmore committed an investment of approximately 35 million USD for two product categories: Mens Suits and Sweaters (Fine and Coarse Gauge).

Reasons that made the company opt for operating inside the Industrial Park, rather than building their own premises are the following: the park is considered a world-class sustainable eco-park ready for ‘plug & play’; provision of essential infrastructure, including dedicated power substations and centralized waste treatment facilities (zero liquid discharge); the Park is operational by Jan 2018 while building a new factory takes time; building lease conditions are very advantageous (15+ years at nominal rates, starting at 2 USD/sqm); additional land is also potentially available for lease within the park to construct own building.

Strathmore plans to hire over 10,000 workers in the next three years. For sweater production, there are 12 different segments of technical training that are required, and the company itself is planning to have 82 trainers to train 1000 trainees at a time. The blazer 129 production will require 50 trainers that will train 500 workers at a time. Training manuals for both segments are already available. The company plans to give 45 days training on soft skills and then complete the rest of the training in-house or on specific training facilities at the Centre of Excellence. In this regard one option discussed is that the company provides specific machineries for its specific training requirements. The company can also provide the trainers for special operation like Linking and Knitting. The blazer training requires 30 days training for basic operations, and additional 40 days training for specialized operations.

Personnel contacted during the inception phase:

Sanjeeva Ileperuma [email protected] +251(0)975-273283 Janaka Atapalty [email protected] +251(0)966674106

4.4.5. Velocity

Velocity expressed a substantial interest in the UNIDO project in relation to developing the soft skill training component. As explained by the training manager, high levels of turnover, punctuality, and absenteeism point at questions about how to better implement soft skill trainings. The company provides technical skill training directly in factory.

A subsidiary of Dubai-based Vogue International Agency, Velocity officially launched their Mekelle operation in 2016. The factory predominately manufactures jeans and knit garments, supplying for companies like Levi-Strauss, Vanity Fair, Zara, H&M and Under Amour. Fully automated the Velocity operation touts a sustainable production model that relies on wind and LED light, as well as claiming its own water treatment facilities on- site.

Velocity operation currently employs around 1250 women and 198 men. Workers are required to have achieved at least Grade 8 education, and be at least 18 years old. So far the company has tried to hire people from Mekelle and its immediate surroundings. Currently the turnover rate is 2% of the overall workforce per month, while absenteeism is 8.5% per month. The employment target of the factory is 10,000 workers, and hiring will be required in the next few years to reach this figure. Of these 95% of will be women. The company is currently completing the second factory workshop that will enable to significantly increase the production.

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Trainings are currently operated as follows. As the company recruits new joining members, workers are trained for one month on both soft skill & hard skill. Further trainings are given directly on the assembly line. Velocity is interested in trainees from the Centre of Excellence who have been trained on soft skills and that can then be trained further in-house on hard skills.

Personnel contacted during the inception phase:

Tefetawit Gebremedhin [email protected] +251(0)914013349 Ephrem Haile hrmanager01.eth@vogue- +251(0)930284776 intl.com Charles Smith [email protected] +251(0)930466870

4.4.6. MAA garment

MAA garment has been extremely important to the inception phase of the UNIDO project. Together with Strathmore Trading the company led the development of a training curriculum for technical skills for basic operators, and the staff made a substantial contribution to both roundtable discussions. The manual has been included as annex to this Report. The HR manager also provided a very important document/presentation on industrial relations and the labour law, which is included as attachment to this report for the soft skills training component. In addition, MAA Garment was instrumental in facilitating UNIDO staff to conduct interviews with workers for the in-depth qualitative assessment.

Established in 2004, MAA Garment is one of the largest fully integrated textile facilities operating in the region of Mekelle. MAA is entirely privately and Ethiopian owned. The operation includes, spinning, knitting, dyeing, cutting, sewing, and packaging of finished goods. The project’s success has allowed for expansion into woven garments as well. Ninety percent of the goods are exported into the foreign market, producing around 4.2 million pieces for distribution with total sales of 7 million (USD). Clients include H&M and Tesco/Primark.

While the company is well established and the bulk of the workforce is operational and receives periodical trainings, MAA garment has the objective to expand current operations. The plan is to increase its knit capacity from 9.6 tons to 20 tons per day and to 131 build a new plant for woven items.7 In addition the staff explained that periodically new hiring are required to replace workers that resign. Records of the company show that this requires hiring 500 new workers every year. Current information about the workforce are reported in the following tables:

Workforce by age and Sex S/N Age Manpower Total M F 1 18-24 190 502 692 2 25-30 179 512 691 3 31 & above 98 168 266 Total 1.649

Workforce by Education and Sex

S/N Education Manpower Total M F 1 < 8th Grade 21 103 124 2 9th - 12th Grade 261 963 1224 3 10+1 - 10+4 139 67 206 4 Degree & above 68 27 95 Total 1.649

Workforce by Age and Education S/ Age Education Total N < 8th grade 9th - 12th 10+1 - 10+4 Degree & above 1 18-24 23 618 63 15 719 2 25-30 53 509 79 66 707 3 31 & 48 97 64 14 223 above Total 124 1224 206 95 1.649

7 https://www.just-style.com/analysis/ethiopia-textile-and-apparel-investments-accelerate_id126505.aspx 132

Personnel contacted during the inception phase:

Fassil Taddesse [email protected] +251(0)911200242 Abebe Girmay [email protected] +251(0)914-003953 Ashenafi G/kidan [email protected] +251(0)914150680

4.4.7. Ethiopian Institute of Science and Technology

The Ethiopian Institute of Science and Technology was initially contacted to discuss broader issues about potential synergies between Mekelle University and the Centre of Excellence. After some very productive conversation, staff members were invited to attend the roundtable discussions. The Institute developed a detailed curriculum for the training of managers that was very well received by the other public and private stakeholders. The manual has been included as annex to this Report.

Personnel contacted during the inception phase:

Dr. Kinfe Tsegay [email protected] +251(0)914706550 Abraha Haile [email protected] +251(0)914756095

4.4.8. Local Government Offices

Local government offices at both Regional and Municipal levels contributed significantly to the discussion during the two roundtables. The project has been welcomed by all the government stakeholders approached, who in turn, provided substantial support through sharing of statistical data and other information that have been used to compile the socio- economic assessment of this Report. UNIDO staff noticed that behind the nascent textile industry there is an important and rather effective teamwork between different local government offices, the Mekelle Garment College, and the Mekelle Industrial Park Development Corporation.

In a context where the textile sector is going to require substantial infrastructural development and hire thousands of workers in the next few years, coordination between local government offices is essential to maximise the societal impacts of industrialization, while minimizing its social and environmental costs. As far as training programmes are concerned, the productive sourcing of the workforce within the framing of the Centre of Excellence is an effort that requires maximising the capacity of local institutions. UNIDO 133

is committed to keep strengthening the collaboration with local government offices as ultimately the success and long-term sustainability of the textile project and the Centre of Excellence depends upon such effort.

The local government offices that were approached are the following:

Trade and Industry Addis Alem [email protected] +251(0)342400351 Bureau Balema Eyasu [email protected] +251(0)978450003 Gebremariam TVET Tigray bureau Dr Mulugeta Hadis [email protected] +251(0)912121282 Weldu SMMIDA Tilahun Tarke [email protected] +251(0)912060652 Weldu BOLSA Ato Assefa [email protected] +251(0)914763116 Tegegne Ato Assefa Hadush [email protected] Urban Job Creation Kahsay Tesfay [email protected] +251(0)914747737 and Food Security

4.4.9. Coordination with Development Stakeholders

The rapid expansion of the Textile and Garment industry in Tigray – and in Ethiopia more broadly – has attracted a significant deal of attention in the donor community. Many institutional donors, development agencies, and non-governmental organizations today focus on projects to support the industrial ambition of the country and, at the same time, mitigating its potential adverse social and environmental effects. The socio-economic assessment conducted in this Report highlights that the area around Mekelle is going to be affected by significant economic, social, and cultural transformations in the coming years. Particular attention needs to be paid to the peri-urban areas where the textile industry is currently rooting, and the connected migratory fluxes from both the countryside and the inner city. Precisely because of the extremely rapid the pace of such transformations, the federal and local government requires institutional support on a wide range of topics.

While the UNIDO project focuses on capacity development at different levels, such intervention does not take place in a vacuum. Several other interventions are currently under implementation, or are likely to kick off soon. For this reason, there is a significant

134 need of coordination between international donors, agencies, and NGOs that operate at the same time to support the textile sector in Tigray. This is to avoid overlapping interventions and to maximise the collective developmental impact of the initiatives altogether. Need for coordination also emerged in the recommendations received during a meeting with the European Union Delegation in Addis Ababa in November 2017.

During the inception phase the UNIDO staff has conducted several coordination meetings with organization that to different degrees and in different ways work on issues related connected with the Textile industry in Tigray. A main outcome of all these meeting is that there is urgent need to convene a coordination roundtable that put together all the different development stakeholders currently or in the process of implementing projects on the textile sector in Tigray. Stakeholders that were contacted and that were identified as to share an interest on the textile and garment sector in Tigray – and hence to potentially involve in a coordination table – are the following:

GIZ Ulrich Plein [email protected] +251(0)911949895 Elisaveta Kostova [email protected] +251(0)910121800 ILO Kidist Chala [email protected] +251(0)911618076 Marta Tsehay Sewasew [email protected] +251(0)913242156 EU Carl Daspect [email protected] +251(0)929007552 Maria-Elena Ruiz Maria-Elena.Ruiz- [email protected] DFID Lindi Hlanze [email protected] +251(0)930105560

NGOs implementing projects on themes relevant to the UNIDO projects in the area of Mekelle and that were contacted during the project’s inception phase are the following:

VIS Chiara Lombardi [email protected] +251(0)968603748 Rainbow4 Kathryn Robinson [email protected] +251(0)912964966 Children Don Hagos Medhin [email protected] +251(0)910531688 Bosco

4.4.9.1. Towards a collaboration with GIZ

During the Inception Phase of the project, the UNIDO staff had several meeting with personnel of GIZ involved in different ways in projects about the textile and garment industry. GIZ was the other major development partner that attended the meeting with

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H&M in February 2017, a meeting that as was remarked above proved to be central in conceptualizing the UNIDO project and framing it through a PPPs approach. GIZ followed a similar route and developed a project that has some similarities with the intervention of AICS/UNIDO. GIZ’s project is based on a strategic partnership with DBL and H&M to develop middle management trainings in the premises of DBL factory.

Therefore, it is self-evident that there is urgent need of some degrees of coordination between UNIDO and GIZ initiatives. A GIZ staff member attended the second public- private roundtable held in January 2018, and in that occasion also government institutions and private companies raised questions about how to coordinate the two interventions. One possible avenue that was discussed is to establish a specific coordination on the middle management trainings, including sharing curriculum manuals, and learning from the experiences of both projects. This could lay the foundation for the two initiatives to merge after the completion of respective implementation phases. A Centre of Excellence operating through a modular approach – as discussed in the second roundtable – could constitute a potential joint platform for such effort. From the perspective of AICS/UNIDO this would present the additional advantage to guarantee stronger long- term sustainability of the Centre of Excellence. What it is suggested here is to address this matter as soon as possible at the beginning of implementation phase. The recommended tool is to establish a joint Project Cooperation Agreement between AICS/UNIDO and GIZ.

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4.5. Recommendations to formulating a one-year training timeline

Based on the findings of the study this section provides a set of recommendations for implementation of the project, with in mind the objective to formulate a one-year timeline of trainings at the Centre of Excellence. Recommendations have been grouped into sub- categories to facilitate reading. These include the four main training components discussed during Public-Private roundtables, as well as institutional recommendations on how to follow up the PPP initiated in connection with the Centre of Excellence and relationship with other implementation agencies operating on the textile sector in Tigray. Before this, the first section summarizes key findings of the Report that inform the recommendations of following sections.

4.5.1. Key findings

 The textile industry around Mekelle is going to require a significant number of workers in the next few years. By themselves, the companies surveyed and engaged in the discussion to establish the Centre of Excellence plan to hire 20,000+ workers in the next three years, and additional 10,000+ to achieve full capacity. These are conservative figures that do not account for small and medium textile companies, as well as major industrial operators already in the area such as ITACA/Calzedonia.  While the number of job seekers with a profile suitable for the textile industry (e.g. 18-25 years old, and Grade 9 or above) in Tigray is significant (~140,000), only about 5% of these can be sourced from Mekelle Municipality (~7,000). By implication, it is expected that the expansion of the T&G will be associated with significant fluxes of migrant workers from elsewhere in the region.  A significant number of workers are potentially available in the six wereda immediately bordering with Mekelle Municipality (~13,000).  Existing training institutions (e.g. TVETs) are not able to meet the existing demand for trainings from both a quantitative and qualitative perspective.  Labour migration raises deeper questions about the transition to industrial life, which entails economic, social, and cultural transformations that need to be taken into consideration when developing trainings, particularly on soft skills.  Labour migration is complex and not unidirectional from rural to urban areas. Peri-urban sites where the industry put its roots become target of multiple fluxes from both the inner city and rural areas. In addition, at least in the short-term, 137

labour migration is never permanent, and rather is characterized by frequent commuting and movements back and forth to the place of origin.  Over 85% of the employees in the textile industry are women with a low socio-economic profile, and eligible for a minimal entry salary. Industrial work is unlikely to enfranchise young women from existing social hierarchies within the household and the broader communities of origin.  While working, women are still expected to perform the same domestic tasks in the household. This and frequent social and cultural obligations in the community explain high rates of turnover and absenteeism. A particular concern is childcare for migrant workers that have no family network in the area where they relocate.  The textile industry and industrialization are regarded as important aspects of the country’s future, and have attached positive notions of progress, modernity and development. Industrial jobs have a higher reputation than jobs in other sectors, even when these pay a better salary. The textile industry is expected to create new jobs and tackle the problem of youth unemployment.  The fact that the textile industry offers initial low salaries has several implications. Regardless of how low these salaries are still very important in consideration of the substantial lack of alternatives that many youth face today, and of households’ reproductive strategies. Particularly, for those households with an agriculture background an additional cash income often constitutes an important risk diversification strategy.  Connected to the question of low initial salaries, work in the textile industry is usually regarded as a short-term strategy. Young workers plan to get enough skills and experience to move on to a better life.

4.5.2. Recommendations on Coordination and a PPPs

 The continued coordination with the MoI is fundamental to guarantee the long- term sustainability of the project and the potential creation of a model to implement elsewhere in the country.  The continued collaboration and involvement of ETIDI at all levels is also extremely important for the long-term sustainability of the project.  The two roundtables organized during the inception phase consolidated a network of public and private stakeholders committed to support the establishment of the Centre of Excellence. The relationship with these actors needs to be nurtured and

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consolidated further. It is recommended that the private and public actors engaged will constitute the initial members of the Centre of Excellence Steering Committee. This is to guarantee long-run effectiveness and sustainability of the project.  It is recommended that the Centre of Excellence is informed by the principles that emerged during the two roundtable discussions. These include: the flexibility and adaptability of trainings to changing industrial conditions; a modular approach in which the provision of basic trainings takes place side by side with more specialised one depending on specific circumstances; the creation of strong links with textile colleges and other textile education institutions throughout the country; the coordination with the Career Centre of Mekelle University, local public employment institutions, and other national databases of graduates (for instance through ETIDI).  ETIDI should be empowered to play the role of strengthening the Centre of Excellence’s upstream and downstream linkages with other education institutions and the job market (for instance through the placement programme).  The role of the Mekelle Garment College as host of the Centre of Excellence needs to be formalized through appropriate institutional agreements. It is recommended that throughout the duration of the project UNIDO staff work in close coordination with the management of the Garment College to assure a timely and effective implementation. One option is basing a UNIDO office inside the premises of the College.  The collaboration with the industrial partners involved in the inception phase (i.e. H&M, DBL, Strathmore, MAA garment, and Velocity) needs to be formalized as soon as possible through arrangements (for instance Project Cooperation Agreements) that detail their role and commitments in supporting the Centre of Excellence.  It is also recommended that Project Cooperation Agreements are signed with GIZ to coordinate activities about trainings for middle management, and the Institute of Science and Technology of Mekelle University to coordinate activities connected to the training of managers.  A coordination roundtable with other development agencies and donors (e.g. GIZ, DFID, ILO, World Bank, etc.) currently or in the process of operating in the textile sector in Tigray needs to be convened the soonest.

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 It is recommended that, at least at an initial stage, the Centre of Excellence will release a Private Certification building on the reputation of the Steering Committee.  It is also recommended that during the project implementation appropriate steps are taken to start the procedures for the standardisation of the training manuals and their integration within the national TVET system via the revision of Occupational Standards and Curricula. This will guarantee a much wider and long-term impact of the project.  It is recommended that information about the Centre of Excellence is disseminated widely through different tools, including placement programmes at times of graduation, job fairs, radio and TV adverts. Available opportunities for trainings, vacancies, and other information are constantly updated on the Centre of Excellence website, and triangulated with other web portals (such as EthioJobs.net).

4.5.3. Technical skill trainings

Considering that the industry will require ~20,000 new workers during the course of the project implementation (i.e. the next three years), following estimations provided by H&M for a sample factory (see section 1.5.), the subdivision of the workforce needed among different departments can be estimated as follows.

Department Number of workers Sewing operators 12,000 Helper (sew+cut+fin) 6,084 Cutting department 36 Sewing department 936 Finishing department 120 Industrial engineering department 42 Merchandising team 84 Others 618

Based on the above, and still following the template/estimation provided by H&M, it is possible to estimate that the approximate requirement of trained workers that the textile industry around Mekelle will require in the next three years is the following:

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Skill requirement Number of workers Training segment Helper (sew+cut+fin) 6,084 Basic operators Sewing operators 12,000 Junior management 1,560 Middle management Middle management 324 Top management 48 Managers

The roundtable discussion on technical skills for basic operators and the manual produced thereafter (attached to this Report) formulated training sessions with a total duration of 45 days. Considering festivities and breaks it is plausible to estimate that every year the Centre of Excellence will be able to host 7 sessions of trainings. For every 15 trainees 1 trainer is required. Estimating a capacity of 200 trainees at a time,8 the Centre of Excellence will be potentially able to graduate 700 basic operators every year. Information are summarised in the following table.

Technical skills for basic operators Duration of one training session 45 days N. of training sessions/year 7 N. of trainees at each session 200 N. of trainers per 100 trainees 13 Total trainees graduated/year 700 Total trainees graduated during the project 4,200

The roundtable discussion on middle management and the manual produced thereafter (attached to this Report) formulated training sessions organized in 7 modules of 2 weeks each. A full training cycle encompassing all the modules takes 14 weeks. Considering festivities and breaks it is plausible to estimate that every year the Centre of Excellence will be able to host 3 sessions of trainings. Estimating a capacity of 50 trainees at a time, 9 the Centre of Excellence will be potentially able to graduate 150 middle

8 The maximum capacity available at the MGC is workshop space to host 300 trainees at a time. However, the number of trainees at any given time will depend on the allocation of the budget for any single training activity of the project. 9 Classrooms available at the Mekelle Garment College can host much larger classes. However, the number of trainees depends on the allocation of the budget for any single training activity of the project. 141 management staff every year. For every 20 trainees up to 1 trainer is required. Information are summarised in the following table.

Middle management trainings Duration of one training session 14 weeks N. of training sessions/year 3 N. of trainees at each session 50 N. of trainers per training cycle 3 Total trainees graduated/year 150 Total trainees graduated during the project 450

The roundtable discussion on managers highlighted that it is difficult to estimate exact numbers of how many people can be trained. Training sessions will need to be based on seminars and case study discussions, and be mainly driven by the industry and the university. The recommendation is to explore the possibility to allocate some project budget to the organization of 4 seminar sessions for managers every year. The main expense incurred in this regard is providing for the cost of national/international experts that give the training. Using personnel of international companies that visit the country for other business related reasons can reduce substantially this cost. Initially, these sessions can be provided by the College of Science and Technology of Mekelle University following the manual compiled as Annex to this Report. The manual encompasses 8 modules for a total duration of 18 days.

Trainings of top managers Duration of one seminar session 1/2 days N. of training sessions/year 4 N. of trainees at each session 10/20 N. of trainers per session 1 Total trainings provided during the project 40/80

Additional recommendations on technical skill training:  The general arrangement agreed upon during roundtable discussions was to design trainings based on a dual step approach. Under this arrangement the general part of the training is provided at the Centre of Excellence, while more specialized training is given by each factory in house.

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 More broadly a modular approach to trainings is what should best describe the structure/organization of the Centre of Excellence. Under this arrangement, basic trainings are provided side by side with more specialised one depending on specific circumstances, and taking into account the evolution of the industry over time. When required, companies can for instance discuss and implement specific training modules on specialized lines of production.  For both basic operators and middle management the project has to account for additional Trainings of Trainers (ToTs). The private sector partners engaged in the discussion have the capacity to provide ToTs, and it is recommended that arrangements on this matter to be fully discussed as part of the stipulation of project cooperation agreements.  Internships, exposure visits, and other exchanges with education institutions, universities, and private sector actors must be incorporated and developed as part of the training activities of the Centre of Excellence. This enables to strengthen the overall quality of trainings and generate more competitive workers.

4.5.4. Soft skill trainings

 Findings from the socio-economic assessment, as well as outcomes of the roundtable discussion with public and private sector actors point at the criticality of soft skill training. The current low productivity of labour is strongly connected with issues about attitudinal change and adaptation to an industrial life.  It is recommended that all the trainees at all levels of specialization undertake soft skill trainings.  Basic operators need soft skill trainings that acquaint them with the industrial culture, including how to behave on a factory setting, time management, industrial psychology, and health & safety regulations. A training manual on this topic is provided as Annex to this Report. As the language of the manual is Amharic, it might need translation into Tigigna.  In addition it is recommended that all trainees be provided with trainings about their duty and responsibility as provided by the current labour law. A training manual on this topic is provided as attachment to this Report.  It is recommended that soft skill initiatives must also involve line supervisors, middle management, as well as managers. These professional figures require

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qualities such as leadership, as well as understanding the social and cultural background of the workers that they manage under them.  Soft skill initiatives must take in consideration the social and cultural background of the workers, and more broadly issues related to the transition to an industrial life. Initiatives have to take into account the very context where workers come from, including the agricultural background of many workers, as well as the gender dynamics of the industry.  Soft skill initiatives must be thought as part of a broader effort to build the future of Mekelle, Tigray, and Ethiopia, and not merely as initiatives that aim to create employment in the short term.

4.5.4.1. Non-conventional soft skill training activities

Roundtable discussions as well as the socio-economic assessment recognised that soft skill training need to deal with complex social, cultural and economic transformation. For this reason conventional soft skills initiatives are not always effective. The encounter between workers and the industry should be one of mutual understanding in which both sides make steps towards the other. For this reason, it is suggested that complementary soft skill development initiatives are designed in a way that goes beyond “traditional” soft skill trainings taught in a class or as part of a broader curriculum.

A main outcome of discussion is that there is need of trainings that involve the broader communities where the workers come from. As remarked by H&M staff members there is need to think soft skill activities where the “Centre of Excellence goes to the communities, and not only vice versa”. Industry based approach to soft skill training need to be complemented by the creation of strong ties and linkages with the communities of provenance of workers. In other words there is need to creating industrial culture at community level.

It is therefore suggested that the project develop some of the following activities in the peri-urban sites in Mekelle around the main industrial conglomerates, as well as in the six wereda around Mekelle Municipality that were screened as part of the socio-economic assessment.

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The following potential activities have been suggested by H&M. The company expressed the will to discuss the formulation of a full concept note and manual and take the lead in implementation.

 Soft skill training activities on the industrial life are provided at community level directly, in the form of meetings and/or workshops. These can include topics such as hygiene, saving (personal financial literacy), reproductive health etc.  Community motivation initiatives through entrepreneurship development linked with industrialization.  Initiative aimed at capacitating workers union to become service and product suppliers for their community and the industry needs (e.g. supply of food items for industrial zone, production of community consumables, etc.)  Providing more focused soft skill trainings to community gatekeepers that in turn are able to communicate and culturally translate key messages about the industry. This can complement existing mass training approaches.  Development of mobile training initiatives for communities (e.g. mobile cinema).  Documentaries based on true stories of industry workers that show the opportunities presented by industrialization as well as the challenges related with the difference of culture between ruler and industrial life.  Documentaries explaining in a culturally appropriate manner what the industrial life and industrialization entail for the communities and for Ethiopia.

The above potential initiatives may require partnership of several stakeholders, such as local government offices, local and national media, worker unions, micro-finance institutions, and other development partners.

4.6. Preliminary list of equipment and machineries for the Centre of Excellence

The list below was compiled by ETIDI in collaboration with major industrial actors. The list is meant to provide a comprehensive checklist of items potentially required to equip the Mekelle Garment College to establish the Centre of Excellence. The list includes machinery, raw materials, equipment, and tools for trainings to be performed in relation to Occupational Standard (OS) levels from one to five.

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Raw materials and Section Machineries Equipment/Tools Ratio Remark Chemicals CAD- A. Embroidery F. Paper / A3 and A4/ 12. Paper and fabric 1. The ratio of Generally, Pattern Software: Wave fill 1. Eraser Scissors each Machines there are Making Fireworks, Auto 2. Album Materials 13. Tape measure will be 1:20 different & digitizer, Font 3. Marker pens/chalk 14. Pattern notcher 2. The ratio of types of soft Embroid creator, Custom 4. Pattern paper 15. Ruler (metal)one each tools will ware in er Design cornering & Design 5. Tracing paper meter be 1:1 designing Machiner manager 6. Marker 16. Square rule 3. The raw department, y (Soft- A. Embroidery 7. sketches, drawings, 17. Hole punch material is but at least Ware) Assist Window illustrations, 18. Fashion triangle difficult to one type of Advanced Server photographs 19. French curve express in software Cad: Lay License 8. samples of fabrics 20. Paper weight terms of ratio must be B. Dongle: As and garments 21. Opener .but at least it available for key 9. written descriptions 22. Masking tape must be both CAD B. Completed and instructions 23. Sticking tape available in the Pattern CAD System :for 10. specification sheets 24. Triangle (45º- work shop. making and Pattern & Marker 11. storyboards/chart 90º) Embroidery. Making , Grading 25. Pattern hook tools and printing 26. L-square software 27. Tracing wheel C. CAD Assyst 28. Hip curve Window 29. Thimble Advanced Server 30. cartridge paper Cad: Lay 31. crayons Liscence 32. pencils , Pencil D. Dongle: As sharpener key 33. Pins E. Digitizer: With 34. Scotch tape complete 35. Image capturing adjustable foot devices support 36. Drills 37. Metal die 38. Computer and appropriate software 39. Marker card/paper 40. Seating 41. Cutting table Fabric 1. Non blowing 42. Paper / A3 and A4/ 53. Paper and fabric 4. The ratio of Generally, Spreadin Spreading Table: 43. Fabric ( denim, wool Scissors each there are g 2. End cutter suiting ,corduroy 54. Tape measure Machines different &Cutting 3. Straight knife ,satins , chiffon 55. Paper weight will be 1:20 types of Machiner Cutting Machine ,rayons ,knits such 56. Masking tape 5. The ratio of fabric y 4. Round knife as: polar fleece 57. Sticking tape each tools spreading & cutting machine double knits, single 58. Pattern hook will be 1:1 Cutting 5. Automatic Bias knits, tricot) 59. Hole punch 6. The raw department, Cutting Machine 44. Marker pens/chalk 60. Thimble material is but at least 6. Embroidery 45. Pattern paper 61. pencils , Pencil difficult to some types of Machine 46. Tailor’s chalk sharpener express in machineries 7. Fusing Press 47. Marker 62. Pins terms of ratio must be Machine 48. sketches, drawings, 63. Image capturing .but it must available. illustrations, devices be available photographs 64. Drills in the work

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Raw materials and Section Machineries Equipment/Tools Ratio Remark Chemicals 49. samples of fabrics 65. Metal die shop. and garments 66. Computer and 50. written descriptions appropriate and instructions software 51. specification sheets 67. Marker 52. storyboards/chart card/paper 68. Cutting table 69. Air flow and flotation tables 70. Pressing tools Sewing  Single needle 71. Fabric ( denim, wool 80. Trimmers and 7. The ratio of Generally, Machiner lock stitch suiting ,corduroy fabric Scissors each There are y machine with ,satins , chiffon 81. Tape measure 8. Basic (Single different under bed ,rayon’s ,knits such 82. Opener needle lock types of trimmer as: polar fleece 83. Needles stitch sewing  Double needle double knits, single 84. Adjustable machine) and machinery in lock stitch knits, tricot) wrench Tool & this machine with 72. Eraser 85. Allen key equipment department, organized split 73. Tailor’s chalk 86. Screw drive =1:1 but at least needle bar 74. Sewing thread 87. Masking tape 9. Moderate And some types of  Feed of the arm 75. sketches, drawings, 88. Sticking tape special (Feed machineries machine illustrations, 89. Thimble of the arm must be  Two Needle photographs 90. Masking tape mach, Two available Four thread over 76. samples of fabrics 91. Scotch tape Needle five based on the lock machine and garments 92. Seating thread over ration.  Two Needle five 77. written descriptions 93. Pressing tools lock, Thread thread over lock and instructions flat Bed type machine 78. specification sheets interlock,  Thread Cylinder 79. storyboards/chart Multi needle Bed type double chain interlock stitch machine for machine, hemming Computer operation controlled bar tacking,  Thread flat Bed type interlock Computer controlled machine for High speed binding lock stitch operation with button bind sewing,  Multi needle Computer double chain controlled stitch machine high speed equipped with lock stitch puller for button holing, waistband Pneumatic operations Snaps fixing  Computer and Blind controlled bar Stitching) tacking machine =1:10  Computer 10. The controlled High raw material is speed lock stitch

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Raw materials and Section Machineries Equipment/Tools Ratio Remark Chemicals button sewing difficult to machine express in terms  Computer of ratio .but it controlled high must be speed lock stitch available in the button holing work shop. machine  Pneumatic Snaps fixing machine  Blind Stitching machine A. Electrically 94. Album Materials 99. Trimmers 11. The After design, Garment heated steam 95. Samples of fabrics 100. Tape measure ratio of each cutting, and Finishing iron with and garments 101. Opener Machines = sewing over Machiner Vacuum ironing 96. Written descriptions 102. Masking tape 1:20 the final y table and instructions 103. Sticking tape 12. The ratio of finishing will B. Boiler 97. Specification sheets 104. Thimble each tools will be done by C. Different forms 98. Storyboards/chart 105. Masking tape be 1:1 the listed 106. Seating 13. The raw machineries 107. Air flow and material is as per the flotation tables difficult to ratio. 108. Pressing tools express in terms of ratio .but at least it must be available in the work shop.

 Some of the mentioned machine are miniature

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4.7. Project Logical Framework

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5. References

Ali, M. (2012), Government’s role in cluster development for MSEs. Lessons from Ethiopia, Chr. Michelsen Institute (CMI), Stockholm.

Ali, M., O. Godart, H. Gö rg, and A. Seric (2016), Cluster Development Programs in Ethiopia: Evidence and Policy Implications, Kiel Institute for the World Economy.

Abdella, M. and G. Ayele (2008), Agri-chain analysis of Cotton Sub-sector in Ethiopia, Report No. 10, Ethiopian Development Research Institute, Addis Ababa.

Berhe, H., T. Tesfay, K. Tsegay, A. Abraha, Z. Haileslasie, Z. Gebremeskel (2017), A Study On Sustainable Development Of Textile And Garment Industry In Tigray, Mekelle University, Mekelle.

Enterprise Partners (2016), Cotton, Textile, and Apparel Sector Strategy, Addis Ababa.

ETGAMA (2014), Ethiopian Textile Sector Profile, Addis Ababa.

ETIDI (2016), Textile Sector Profile, Addis Ababa.

ETIDI (2013), Textile and Clothing Value Chain Roadmap, Ethiopian Textile Industries Development Institute, Addis Ababa, Ethiopia.

FDRE (2016), Growth and Transformation Plan 2, National Planning Commission, Addis Ababa.

FDRE (2011), Growth and Transformation Plan 1, National Planning Commission, Addis Ababa.

International Trade Centre (2016), Textile & Clothing Value Chain Roadmap of Ethiopia, Addis Ababa.

Kassaw, M. (2013), Competitiveness Model Development for Ethiopian Traditional Fashions in the Global Market, Addis Ababa University, Addis Ababa.

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Martin, R., and P. Sunley (2003), Deconstructing Clusters: Chaotic Concept or Policy Panacea?, Journal of Economic Geography, 3(1): 5–35.

Mekelle Textile Garment College (2013), Research on Textile, Clothes Products and Leather Products, Mekelle.

Tigray Bureau of Trade and Industry (Bureau of T&I) (2014), Textile, Garment And Leather Products Potential Growth, Tigray Regional Bureau Of Trade, Industry And Urban Development and Bureau of TVET, Mekelle.

World Bank (2016). Government Objectives: Benefits and Risks of PPPs. [Available] http://ppp.worldbank.org/public-private-partnership/overview/ppp-objectives

World Bank (2009). World Development Report: Reshaping Economic Geography, World Bank, Washington, D.C.

Yoshino, Y. (ed.) (2011), Industrial clusters and micro and small enterprises in Africa: From survival to growth. Directions in Development—Private Sector Development, World Bank, Washington, D.C.

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Annex 1. In-depth interviews transcripts

Qwiha training centre (December 2017) A preliminary discussion I had with one trainer highlighted that gender roles are assigned already at the stage of training. Men are hired for printing while women for sewing. A main reason the trainer gave is because “it is difficult to keep men sitting all day”.

1) Female, 27 years old. Before enrolling for the training she spent two years working as time keeper for a construction company in the area between Harar and Dire Dawa. Because of the protests and conflict that erupted in the area – especially connected to students – she decided to move back to Mekelle. Her education level is Grade 10. She is married, with 2 children of 5 and 12 years old, her husband works in the construction sector as carpenter at a place called Meremiti, 7 birr by minibus far away from Qwiha. The reason why she joined the training is because she was still looking for a job after she relocated, and she heard about the training from some brokers in Qwiha. For the training she is given 20 birr/day to cover basic transport and food. She has been attending the training for 12 days now, and she is very happy and eager to learn a lot about the textile industry. They did not have a discussion about salary, and she does not know how much basic workers get when first employed. She heard that entry salary is very low. She also heard that the industrial life is tough because you have to work through shifts, maybe for one month you work at night, and the following month during the day. She also heard that often you have to stay in the workplace longer at night. Despite these issues she is very eager to get employment in the sector, especially because these days there are no many job opportunities for young people. Her husband currently earns about 2500 ETB/month, altogether their monthly budget is about 3000 ETB. Considering all the expenses, she contends this is not enough. The house rent is 600 ETB, school fees 300/month for each child. Decisions about how to spend the budget are taken jointly between her and her husband. She believes that working for a company is what is best in the long run, even if the initial salary can be low. Her ultimate dream is to become manager of one big company. The positive aspect of working in a company is the possibility to get career advancements. She never tried to establish a MSE, also because she does not believe in that model.

2) Female, 18 years, Grade 10. She is originally from Qwiha, but she currently lives some ten km away from town, the cost of transport is about 10 ETB. She lives with her mother, and two other brothers, both working in the construction sector, 1 at the site where DBL

152 is constructing its facility, the other for a company called Zaram. The mother has got 0,5 hectares of land and she produces sorghum, wheat and teff. This was her father’s land who passed away sometimes back. All the production goes to family consumption. They also have 2 oxen and 1 cow that produces enough milk for the family. They use fertilisers (50kg DAP, 50 kg UREA) that they pay for in advance as it is no longer possible to have them on credit. Rather than working the land like her mother does, she would prefer to get a job in the textile industry. In an industrial setting you learn skills that you can then employ to create your own business. She contends that the same does not apply for agriculture, in other words her perception is that industry offers her more opportunity in the long run, rather than agriculture. Her two brothers built a house in the mother’s property and they share with her half of their salary, they get every month 2000 and 1500 ETB. She contends that the cash income plus the product of the land make up for a decent household living. She is happy that she could now get her own salary from working in the textile industry, because this is what she defines as “her own interest”. She would like to get enough skills to be able to develop her own garment business in the future. She was not told what are the working conditions in the industry, including salaries. She heard that the salary is minimum initially, but that it can increase over time depending on your ambition. She also heard that shifts can be tough, but she is ok with that. Her ultimate dream is to start her own garment business.

3) Male, 20, from Qwiha, completed Grade 12. He is enrolled into an evening course on management at the Sheba College in Mekelle. He lives with her mother and they are the only two people in the household. His mother owns a shop of groceries. He decided to enrol in the textile training because he believes this is the future. He really likes the training that is attending, which focuses on printing mainly. The training lasts for one month only and he is eager to make the most of it. While he heard about the training in town, he does not have information on other textile companies in the area that are also seeking for employees. He has got two sisters and one brother. One sister lives in Dubai. She works there as maid, the other one lives with his father. The brother works in the construction sector as carpenter. His father is a policeman, but he has got another family now and lives in a different house. His mother has got also some land some 30 km away from Qwiha. Her uncle is in charge of farming and he shares some profit with his mother. Although salaries are low, he sees the training as an investment for the future, rather than for the present. He would have no problem in taking shifts and earning a low salary initially. I then ask the question about how his friends see the career he wants to pursue. He contends that his friends are very happy – it seems there is no peer stigma on jobs in

153 the textile sector. Rather, it is seen as the future for Tigray. His ultimate dream is to learn how to handle a business better than Bill Gates.

4) Female, 22, completed Grade 12, from Mekelle, currently living in the area around the university. Her household is composed of 5 people. Two brothers are 25 and 28 respectively, one is a bajaj driver, and the other is married and lives in the same family compound, although in a separate house. This latter brother is a farmer and works some family land at a location a bit far away from home. He produces wheat, teff, and sorghum and has got 4 oxen. Recently he harvested 3 quintals of wheat and 2,5 quintals of teff. All the harvest is used for family consumption and is not traded. Her brother works alone and has no permanent workers, he only occasionally hire daily workers for harvest. Additionally, they also have some 5 timads (0,75ha) that they share with other family members in two different locations. One piece of land is about two timads and harvested 13 quintals of wheat. For the other 3 timads they are still waiting to know the extent of the harvest. She actively participate in many of the agricultural activities, including helping with harvest, and removing alien plants from the field. In the past she was also helping with threshing, but not this and last year because she was busy with school. Although she is now enrolled in the training, because it is currently harvesting season, after work she joins her family and help as much as she can. She contends that if she will get the textile job she will have to help with the land anyway, although she will try to prioritise the job as much as possible. She contends that her father also agrees that if she is employed she will not be able to fully help with the land. Other daily domestic tasks that she perform include fetching the water and baking injera together with her mother. They have two donkeys and she is in charge of them during the night time. Her mother is very supportive and she believes it is important that she started the training. She heard from other people about how it is working in the textile industry. A cousin of her is employed at Velocity. This is how she came to know about the training opportunity offered by DBL. Her cousin started with a very minimum salary, 600 ETB, and now after 2 years she gets about 1000 ETB. Good thing is that they provide lunch and there is a clinic for any health issue. She is attracted about the opportunity to get a job in the industry because this gives you the chance to grow. It is tough, but given the current condition of high unemployment, the textile industry represents a pathway for uplifting. Her cousin is happy about the shifts and all the other work arrangements at Velocity. Initially she also wanted to register at Velocity, but when she found out it was already too late and they closed subscriptions. Her dream is to become self-sufficient, she does not

154 want to depend on other people. For instance, when she will get married, she will still want to retain some economic independence from her husband.

5) Female, 19, completed Grade 10. She lives in Houseba, a village nearby the wind farm that is possible to spot also from Mekelle airport. From Qwiha you have to get a 10 birr minibus, plus walking for an additional 30 mins. Her family is quite large, they are 11 altogether in her household, 6 brothers and 3 sisters plus her parents. Her two sisters are 4 and 7 years old, and alongside 4 of the brothers are minors that are either at home or attend primary school. The other two of her brothers are 16 and 21, this last one is a student at Arba Minch University. The family’s main source of income is from farming. They have 7 timad of land (1,75 ha), but they also rent from other additional 3 timads. They have 3 oxen, 2 cows, and 3 donkeys. Except for the first born who was sent to university, the rest of the household members are all involved in agricultural activities. She also helps as much as she can. However, if she will start working in the textile company she’ll not have time for that. She heard about the training offered by DBL one day when she went at the market in Qwiha. Other tasks that she performs in the household include baking injera, fetching water, cleaning the stable, and preparing the flour for injera. The only income that the family currently raise is from the product of the land. They have just harvested 25 quintals of wheat, 15 of sorghum, and 6 of lentils. These are all products that they sell at the market, while retaining a portion for their own consumption. They do not grow teff because the land where they are sitting is not suitable for it. Her parents are very happy that she was able to enrol in the training. Both her mother and father think that a job in the industry comes first. Some of her friends are currently working in the sector. They contend that although the salary is very low this is the only way to get a job these days. Having a poorly paid job is better than having no job. Her dream in life is to achieve self-sufficiency and to get married.

6) Female, 20, completed Grade 10, from Qwiha. Her household encompasses 7 people, 3 sisters and 2 brothers. Except one of the sisters – who currently run a coffee house – all the other siblings are students. Her father was a teacher and is now retired, her mother housewife. She heard about the training from some people she knows. Before that she was also helping her other sister with the coffee house. She is very happy about the training, the first couple of days she found it a bit difficult, but now she is completely on top of it. Her perspective is that she likes the job, but she not given information about salaries and other issues. She knows salaries are low, but they tend to get better in the longer run. At home she is in charge of several tasks, including washing clothes,

155 cleaning, baking injera, fetching water. These are tasks that she will be asked to perform regardless of whether she’ll get the job. Her dream is to be able to get some extra education and then migrating to Israel.

7) Female, 21, from Mekelle, completed Grade 10. She currently lives by herself in Qwiha, and she works at a coffee house. This business was not part of the Micro and Small Enterprises scheme, she opened it independently without getting resources and support from local government offices. Before moving to Qwiha she lived in Shire and was working as an employee for another coffee house, her salary was 1500 ETB/month. Her salary at the coffee house in Qwiha is currently 2000 ETB/month. She decided to enrol in the training because she wanted to try something else and make the most of the opportunity. She heard about the training from some friends. She knows that the initial salary in the industry is about 800 ETB/month. Despite this being considerably lower than that she would make at the coffee shop, she believes that trying to work in the textile sector is an investment on her future. She contends that 800 ETB is still a fine salary if you are living with your family. If you live by yourself it is not sustainable. What she likes about the textile industry and the reasons why she would be willing to get a lower salary are the following: the working environment is clean; you can still study in the evening by taking night class from 5 to 8pm; alternatively she can still work at the coffee shop after 5pm and diversify her income; work in the factory helps you to grow and to build a better future, whereas the job at the coffee shop has no prospects of growth. The overall dream she has is to be self-sufficient and independent.

MAA Garment factory (January 2018) 8) Male, 22, completed Grade 12, from Qwiha. He has been working at MAA garment for 3 years now, and is currently enrolled for a degree in accounting at Sheba University College. He currently works in the cutting section. He has got 3 sisters and 1 brother, but they all live in different households. He lives by himself with his mother, who just keeps the house. He provides for her. Working at MAA is good because it is close to where he lives and in the evening he can attend class at college. There is a career ladder and he is currently operator level 3. But his dream is to work in bank after completing his degree. He also speaks decent English. He contends that the industry is providing very good opportunity for the people in Mekelle, especially for women and youth. The textile industry is currently one of the few opportunities for people with little education. More broadly the industrial turn is good for the people, because it is potentially enfranchising, and for the country’s growth. He started with a salary of 728 ETB/month, now he gets

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1622. They have a rent of 800 ETB, this making the salary not enough for living. He is taking this period of his life as a transition. He wants to work hard and get further education first, then he will think at getting married and getting a better job.

9) Male, 30, has worked for the company for the past 13 years. He is a mechanic in charge of maintenance. He was a basic operator until 5 years ago. While he was operator he graduated at the TVET in General Mechanics. He studied during the evening shift. Before getting employed he had Grade 8 education only. He first got grade 9 and 10 and then he enrolled in the TVET. He has married twice, and with the current partner he has a son of 1 year and 5 months. During his first marriage we used to live in the surroundings of Qwiha, afterwards he relocated in the city centre. His current wife used to work for MAA garment for two years. Then, when the baby was born, she decided to stay at home: her salary was 1000 ETB/month, getting a servant that serves as baby sitter costs more than that. His salary is quite good though, he gets 3800 ETB/month, although he mentions that when he started his initial salary was 150 ETB during the training and 230 ETB first employment. Considering that the rent for the house is 700 ETB, his income allows his family a decent living, although he is not able to save any money. In the future he would like to start his own mechanics firm. He would quit his job only if he gets a better salary elsewhere, or if he can open his business. He contends that the opportunities provided by the textile industry are very important for Mekelle and Ethiopia. He only wishes that jobs could pay better salaries. But the main focus now should be on creating as many job opportunities as possible. In his experience he sees that the main reason behind high turnover rates is because of low salaries. People have high initially expectations about working in the industry, and then they get disillusioned after a while. Many workers resign after the first month. The reason why people stay nonetheless, is because a career ladder makes salary increases possible.

10) Female, 27, has worked at MAA garment for 7 years. When she started she was a helper, she is now operator level 3 after taking several trainings. She works in the sewing segment. While working at MAA she managed to get a diploma in accounting at the Nile College. She is married and has two daughters of 3,5 and 9 years old. They live in Qwiha. Her husband has a permanent job in a construction company. No other people live in the household. Her husband on average gets 3/4000 ETB/month. Her gross salary is 1620 ETB/month, the net salary is 1390. Because they live close enough to her mother, the children after school are taken care by their grandmother. The family income is enough because they own the house where they live. Her dream is to start running her own

157 business at some point. She contends that decisions about how to spend the family budget are on her. Her husband gives her a majority of the salary and he keeps only some for personal expenses. The textile industry, and she refers to the industrial park more specifically, is very good for the future of the people and of the country. Her personal view is however that she prefers running her own business rather than working as operator. For her children she wishes that they will become civil servants, that kind of life is much smoother. If she opens her own business they will be able to continue it after she retires.

11) Female, 18, has worked at MAA for the past 6 months. She has got Grade 10 at school and this is her first job. After she graduated, she spent some time looking for jobs but what she could find was only employment as daily labourer. What she likes about this job is working in a clean environment and to have job security/stability. She lives with her parents. She has three sisters – all older than her, all married and live with their husbands – and 1 older brother living at home. Her brother completed Grade 10 four years ago, but has been unemployed since then. Her parents do not have proper jobs, although they have 2 houses that they rent at 500 ETB each. The 1000 ETB household income is then integrated by some remittances of one of her sisters, who lives in Addis, and who sends money from time to time. Her other sisters are both housewives and live in Qwiha. Her father used to work as guard for the kindergarten. Her initial salary at MAA was 800 ETB, now increased to 1020 ETB. This is therefore a very significant contribution to family budget, she gives it to her mother almost in its entirety. She also mentions that often the salary is less because she is absent. For instance this month she did not go to work one day because she had to attend the wedding of a relative from her mother’s side of the family. In this case, considering that it was only for one day and that she asked permission in advance, they will deduct it from her annual leaves. I then notice that she has a wedding ring and I ask if she is married. She says that she is not married but that she keeps the ring to protect herself from inopportune people. Her dream is not one very definite, she just wishes herself for the best and a better future. She is ready to move elsewhere in case she’ll find better job opportunities. But rather than employed in a company she would prefer to start her own business, a hair saloon for instance. Her brother sometimes gets daily jobs around Qwiha and he even started working at MAA, but he stayed only for 1 month. She contends he is lazy and prefers to stay at home doing nothing. Her parents always complain about him, but he has no motivation. She decided to work for MAA because it is a very well established company and is very well known in Qwiha. She took a 45 days training. Initially she thought that work could be difficult,

158 but soon after she realized that it was about very simple tasks. During the training she also got a salary of about 700 ETB.

12) Female, 21, has been working for MAA garment for the past 5 months. She has Grade 10 from school and a diploma in accounting that she got from the Libanos College in Qwiha. She would like to specialise on printing, she already agreed with her supervisors that as soon as the company will organise the next training they’ll make sure to include her. She is now categorised as helper, meaning that she assists other operators in doing their job. She is married and currently lives with her husband, they have one son of 1 year and 4 months. Her husband is a civil servant and works at the electrical authority. He gets between 2000 and 2500 ETB/month. Her gross salary is 1200 ETB, net becoming 1040 ETB. However, as she is often absent, she normally gets around 800 ETB. The reason why she is often absent is because she has no family support for her child and she often has to take care of him. The baby goes to kindergarten and when he is sick she has no other option but to skip work. They are originally from a place about 70 km from Qwiha from which they relocated 5 years ago, and they have no one that can take care of the children. Main expenses are rent (600 ETB) and kindergarten (300 ETB). Their total income is sufficient but they do not manage to save. She also notes that currently she is pregnant and that soon another baby will add additional pressure on family budget. MAA provides maternity of about 3-4 months. However, she is not sure whether she will be able to come back to work after the maternity leaves. It very much depends if someone else from her family will be able to join and help. Her dream is to go back to school and upgrade her diploma on accounting. In Qwiha there is a University College that offers such possibility. She believes that current industrial development in Tigray is a very positive development because it will generate new job opportunities.

13) Female, 21, has been working in the company for 1 years and 5 months, her current level is Operator 2. She received a technical training of 1 month at the beginning. She has got a Grade 10 and she is currently studying to get a Diploma at the Libanos College in Qwuiha. The Diploma degree runs over 3 years and she’s currently half way through. The fee for College is 200 ETB/month, and classes run from 6 to 9pm every day. Before enrolling in the training she had her own cooperative association (a MSE) and they produced cobblestones. The got a public contract from the city administration for 3 months, but this goes on rotation, and after the initial period the contract was not renewed because it was given to a different company. As a result the company went out of business because no one else would give them jobs. In those 3 months when they had the

159 public contract she managed to make a profit of 20000ETB, so it was a very profitable business, but without public contracts very unsustainable. After that she worked at the MAA cafeteria for about a year, her salary was about 728 ETB. She then became an operator and initially the salary was the same, but now she gets about 1200 ETB/month. She attended a 1 month training, which she enjoyed very much, and was not difficult to understand. She never gets absent, unless there are very compelling and urgent matters. She is originally from Quiha and she currently lives by herself because her parents live nearby the Mekelle Industrial Park, on the other end of the city. Rent is 350/month plus the utilities. As her salary is never enough, she gets support from her family, often in kind. But she is determined to complete her diploma, which is the main reason why she is in Qwiha. It’s been 3 years since she’s been living by herself, before she was living with one of her sisters, who also lives in Qwiha. She has some money on the side because of the cobblestone business, and her dream is to open at some point in time her own business, perhaps juice shop. The current trend of industrial development is positive because it provides new job opportunities, it helps people to get critical skills, and is good for the development of the country as a whole.

14) Female, 32, she has been working for MAA for the past 7 months. She graduated in 2005 and then took care of her two daughters at home. She is married and her two daughters are 8 and 14. She took a training of 45 days before starting the job on both technical and soft skills. Initially a ‘helper’, after the training she was promoted to Operator 1. Her husband is the deputy director of a high school and his salary is 4800 ETB (6000 gross). They pay a rent of 580 ETB which includes also utilities. She decided to start working because life is getting increasingly expensive, her net salary is currently 1044 ETB. She’s never been absent because her daughters go to school. She perform her household duties after work when she comes back. The work schedule is from Monday to Friday until 5pm, Saturday until 2pm. She does not like the textile job very much, but this is far better than staying idle in a context where life is getting increasingly expensive. Working is important because you get skills that can help you in the future. What she does not like is that the management is not flexible when it comes to grant permission for holidays and days off, and that different supervisors give her different instructions and then they rebuke her because she is not doing what she was told initially. Also salaries are very low considering the amount of work. But she does not see her future in the industry anyway. They are currently building their own house and the idea is to also build a small shop attached to the property. So after the construction phase will be completed she will resign from work.

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15) Female, 24, she has worked for MAA garment in the past 6 years. She is currently Operator 3, and she attended training when she started of 1 month. She attended an additional 3 days training on entrepreneurship sometimes after. She lives with her parents, who are traders of traditional Ethiopian garment and textile. Altogether they are 3 sisters and 2 brothers. Two of the sisters now live by themselves as they established their own family. The other sister is a student currently enrolled on Grade 10. One of the two brothers is also a student currently attending Grade 5, the other already graduated and works at the airport in the field of maintenance while attending college. Her gross salary is 1600, net 1390 ETB. Her family does not ask to contribute to family budget. She retain a majority of her salary for herself. She has got an equb worth 500 ETB/month, which means that she saves at lest 6000 ETB/year. In general she likes working at MAA because this allows her to learn skills that she can use in the future. Negative aspects are that salaries are low; the supervisors are not always efficient and helpful with basic operators; she’s been working here for a long time now, but the initial expectations to climb rapidly the career ladder have not me the reality quite yet. Her goal is to save some more money to then be able to open her own business, ideally a cosmetic boutique. She thinks that by next year she will have enough money from the equb. In general the current trend towards industrialization is positive for Mekelle because it is creating job opportunities for unemployed youth. She also hopes that more factories will mean more competitions for labour force and therefore better salaries. But she is currently not interested to move to a different company, her focus is on her own business. Once she will establish the business she plans to start college as well.

16) Female, 28, has been working at MAA for the past 8 years. Before that she was a student, she obtained Grade 10. Between her studies and employment she spent one year looking for jobs. She lives by herself. Her family’s house is 40km away from the factory. She has 1 child of 9 years and she is divorced. Her net salary is 1390 ETB/month, when she started it was 320 ETB. Currently her rent is 600 ETB. As her salary is not enough, her father sends her money quite regularly. She also receives help in kind from other family members from time to time. She is always at work and she tries her best to be absent as less as possible. She never tried to find alternative jobs because she believes her qualification does not allow her to find something better. Her dream is to start her own business. Ideally she would like to buy her own sewing machine and start her own garment shop. While initially she had high expectations about the factory job, she believes that the fact that her salary is so low does not allow any real change in her life.

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However, this is the best that is currently available as no many alternatives are out there waiting for her. The textile industry has the advantage that creates many jobs for young unemployed people; however the problem is that this never translates into the expected change for a higher lifestyle.

17) Female, 24, she has been working at MAA for the past 8 years. Her education background is Grade 10, then she took a training at the TVET college on garment for two years before finding employment at MAA. Before starting she took an additional 1 month in-factory training. She is a senior operator, her gross salary is 1720 ETB, net 1490 ETB. She lives with her parents in Mekelle, she has got 1 sister and 2 brothers, who are all living at home. She is the oldest sibling; all of her brothers and sisters are still studying. 1 is at college, 1 is currently taking Grade 10, and 1 is at the university. Her father is a retired civil servant, while her mother is housewife. Most of her money salary contributes to her family budget: this is needed to cover the studying fees of her siblings. What she likes about her job at MAA is that she can get skills for her future and that she can currently provide substantial financial support to her family. However, the cost of life is increasing sharply and salaries as they stand now are very low. Her dream is to open a shop in Mekelle. She is currently trying to save some money, but she is also looking at the opportunity to borrow some money through microfinance institutions. In the past 8 years she nonetheless did not look for other jobs, she was fine at MAA and she believes it is difficult for her to find a better alternative considering her education level. In general, the current industrialization trend is positive for Mekelle because it is opening up new job opportunities.

Qwiha training centre (January 2018) 18) Female, 26, Grade 10 completed 5 years ago. This is her third week of training at the DBL facility. For 5 years she worked in Saudi Arabia as a housekeeper, and 5 months ago came back. Going back was her own decision and not because of repatriation of Ethiopians. She contends that as development was coming to Ethiopia she wanted to explore job opportunities back home. She lives at the house of her sister, her 4 children, and her father, who is now retired and gets a pension. The four children are all students, between Grade 2 and 10. Her sister is a cleaner at a military base in the area, she approximately gets 1000 ETB/month. Her sister’s husband was working in the military and is now retired. She believes that the textile industry is a very good opportunity for people around Mekelle. She likes the training very much, and she feels this is good for her future. Through the training she feels she can get jobs not only at DBL, but also at

162 some other companies. Her ultimate aspiration is to be able to open her own business. However, she thinks that after the training she’ll get a good salary in the textile sector. In broad terms she is confident that the textile sector will bring development to the local economy, and particularly job opportunities for youth and women. In her view, thanks to the textile sector and other industrial developments, Mekelle in 10 years is going to look like a developed country.

19) Female, 21, she was awarded a diploma in water supply management 3 years ago at the Water Technology Institute, Open University in Mekelle. She thought that we the diploma degree she would have been able to find a job in the field of water management, but so far her expectations were not met by reality. She tried the avenue of civil service, and particularly local government offices, but they all look for candidates with job experience. This discarded her from being competitive. She also applied to other jobs but unsuccessfully. Her last application was for a position of messenger but was unsuccessful. She lives with her father and 3 sisters. Her father runs a construction business. One sister works in the police, one in the marching band of the police department, the third is a secretary. Her expectations about the training is to get employment as soon as possible with DBL, and at the same time to get critical skills that allow to seek for job in the industry at large. She heard about the training from other people that attended it before. Her preference would be to get employment at DBL because she thinks they are serious and the training is very well done. More broadly, the textile industry and industrialization are positive for Tigray because they can provide jobs to unemployed youth and women. In 10 years Mekelle will be very different only if the youth of today will find proper jobs. Asked about she sees herself in ten years, she responded that she will try her best to have an established business that create jobs for other people. She really likes the training and how the trainers teach in the class. The training is meeting her expectations; she is positively impressed about the openness of trainers to listen and to respond to questions.

20) Female, 19, completed Grade 10 in 2015, then she started a 2 years degree at college which she is going to complete next year. Her diploma is in accounting and as she takes the evening class, she has enough time to work during the day. She thought that taking the training would have helped her to find a job. Getting a job in the textile industry would be a good way to earn some money in the mean time she finds a better job in accounting. She lives with her uncle from the father side, at a locality known as Laj, which is approximately 10 ETB away from the Qwiha training centre. The training

163 organization gives her 20 ETB every day to pay for transport and other minimal costs. Her uncle was a guard and is now retired with pension. His wife works at home. They also have a daughter, who has a PhD degree and now works in Addis Ababa. From the training she expects to get enough skills to be able to find employment in the sector. Where she lives now is close by to Velocity. She actually learnt about the training through a friend that works there. She also wanted to apply for a job at Velocity but at the time she started looking they had already filled all the positions. She considers the experience of her friend not very positive. She was asked to sign a contract for 3 years at 800 ETB/month. Ultimately she did not sign the contract because she thought it was unfair, and because of fear of retaliation in case she would quit the job earlier than the 3 years. Considering how she was treated during training she believes that DBL is a better employer. She feels she can leave any time and there are no particular obligations. She did not discuss details about work conditions, but she expects a minimum salary of 1500 ETB/month after graduating from the training. In broad terms, the expectation about all the big companies currently investing in Tigray is that they will create jobs bringing development for the area of Mekelle, and for Ethiopia more broadly. In ten years she sees herself running her own business, and hopefully giving jobs to other people.

21) Female, 19, she completed Grade 10 one year ago. She then started a job as time keeper in one of the military bases around Mekelle. When she heard about the opportunity offered by DBL with the training she decided to quit her job and start the training. Her job was paid much more than the average starting salary in the textile, with over time the salary could reach 1800 ETB/month. The reason why she quit is because she is confident that she can go back and work at the military base if the textile job does not turn out as expected. She obtained a letter certifying her competences, so she is pretty much sure that she can go back anytime. The problem with that job is that she did not see a future in it. For instance she mentions that there was even a bus service bringing her back and forth to the city. Originally she is from the countryside, about 20 km away from Qwiha, 7 ETB by minibus. But she now lives in Qwiha because of the training. Her sister is also attending the same training, so they have rented a house together, paying a rent of 450 ETB. Her father is a farmer. He has about 1 ha of land but scattered in several small plots. In addition they have a small plot of irrigated land. In the former they produce wheat, sorghum and teff, in the latter vegetables. While the non-irrigated land is for their own family consumption, the irrigated one produces vegetable for the market. Altogether they are 3 sisters and 3 brothers, all involved in agricultural activities with the family land. Her sister was previously also working at the open market for the kebele. She

164 quitted the job to get the opportunity of the training with DBL. She mentions that her fathers left them quite free to choose what to do. She actually encouraged them to find jobs out of agriculture. The decision to quit the job at the military base and to start the training was her own choice. She really respects her father (who is also a priest) and helped her to open a bank account to save the money that she made with the military job. Once she will start the textile job she expects an initial salary of about 1000 ETB that then can grow over time.

22) Female, 20, she completed Grade 10 three years ago but struggled to find a job after that. Originally she comes from the surroundings of Adwa. She learnt about the training from some friends a neighbouring village who also took the opportunity. To cut the costs she and these two friends decided to share a house altogether in Qwiha. They get 20 ETB/day from DBL, plus she gets support from her family. She really like the training and she is eager to learn as many things as possible in order to be able to get a job in the sector. Her father is a farmer. He has 0,25 ha of land and he produces staple crops for family consumption. She has 5 between brothers and sisters and they are all living at home. Some of them are student, but in different ways and extents they all help with the land. Once she learnt about the training her father encouraged her to take the chance and do the training. Her primary focus is now to find a job as soon as possible so that she can help her family.

23) Male, 19, completed Grade 10 three years ago. He lives with his parents just outside of Qwiha. In the past 5 months he worked in the construction site of DBL as daily workers. His task was being ‘helper’ of other metal workers. After some time he became a welder. Initially he was making 60-70 ETB/day, then 120 ETB/day. He now enrolled in the training for printing. He would prefer to get a job in printing rather than keep working as a welder. But the main reason why he decided to do the training is because after the construction will be completed he still wants to try to work for DBL. For the duration of training he lives in Qwiha together with a friend, they share a rent of 300 ETB/month. He has 3 brothers. 2 are married and live very close to the family house. The third in the summertime he helps with agricultural works on the family land, in winter he works for a cooperative producing cobblestones. They have 1,5 hectares of land. Her father and mother are divorced, his brother and him are living with her mother, and the land belongs to her. They produce wheat, sorghum and teff. Sometimes they sell some wheat, but they consume most of what they produce. From the printing job he expects an initial salary of 1500 ETB, but with the expectation that this will increase over time. Industrialization is

165 very positive for Tigray and for the country. Big companies are important because they expose Mekelle to the international context. Asked how he will see himself in 10 years, he contends that if he gets the DBL job he will get married and have many children.

24) Male, 19, completed Grade 10 last June and has been unemployed for the past 5-6 months. He is originally from the area of Adwa. But one of his older brothers lives in Qwiha, so he started looking for jobs in the area. He learnt about the textile job from a friend. What he expects from the training is to become competent in basic operations and acquire enough skills to get a good job. His brother is employed in a construction company, they are currently building a new plastic factory. When he relocated from his home village he thought to find employment in the construction sector like his brother, but now that he is taking the training he is more interested in getting a textile job. His dream is to start his own textile related business by himself. His parents live still around Adwa. His father also works on construction, his mother at home. He has also two young sisters that currently are students. The current trend towards industrialization is very positive for Ethiopia. The main problem today is unemployment. Youth need to be given the opportunity to build their own future.

25-26) Two females, both 20. They came to enrol in the training while I was concluding another interview. I then asked them to stay a bit longer to be interviewed, and they agreed. They are both from Mekelle. They heard about the training from a friend who is already registered. One of the two is attending Grade 10 now, the other completed it 4 years ago. During this period of time she has been unemployed for three years, then she worked for 1 year as shop attendant. She decided to quit because her salary was 500 ETB/month. What they expect from the training is to get some skills to be employable in the textile industry, hopefully with DBL. Their dream is however not to work for big companies, but rather to be able to set up their own business. Asked why it is so difficult to find a job for young people today in Ethiopia, they respond that many people just stay at home and don’t get exposed to information about potential opportunities. This generates anxiety and as a result depression. Another reason is that young people are very selective these days about the jobs they want to do. They believe they can immediately get very well paid positions, without thinking that they have to start from less competitive jobs first. They are picky. Other people have in their mind a career as civil servant as their ideal job. Starting your own business is today very complicated because you need capital and a very good business plan. Both of their families are relatively wealthy. The parents of one of the two girls are civil servants; the others are working for good

166 companies. They mention that the decision to enrol in the training was their own, and that their family did not push nor encourage them. They expect an initial salary of about 1500 ETB/month when they will start working at DBL. They will however also accept less than that provided that they can get into a career ladder. But most importantly now, they need to find a job for their future.

27) Female, 25. Before starting the training, for the past 3 years she worked for a nursery of plants managed by a private company getting contracts from the Ministry of agriculture. Recently they had to restructure the company because the business was losing money, so she was fired. She spent the past year at home and not particularly looking for a job. She is married and has a 6 years old son. Her husband works at the Ministry of agriculture. She does not know exactly how much is his salary, but he gives her 3000 ETB for household expenses. On top of that he has a small workshop where he does woodwork privately. They live in Mekelle and they have a rent of 1000 ETB/month. From the training she expects to get skills that will help her to find a job in the sector. She known no one that works on other textile companies, so she does not know exactly what are the work conditions. As life is getting more and more expensive, her husband and she agree that they need some extra money, this is why she is seeking employment. While she is at work her son will be at school, so a job in the textile industry would be ideal. In ten years she would see herself starting her own business. This could be related to the textile industry or about something else, a normal shop.

28) Female, 26. She has a certificate for teaching at school (TTI) that she got in Adwa, where she is originally from. She worked as a teacher for REST, the Tigrayan veterans association. She had a permanent position there, but then she decided to move to Saudi Arabia to work as a domestic worker. She went there legally, worked for 8 months, then she faced a lot of problems and then she had to come back. She came back approximately 4 years ago. For two years she was working in a coffee house but it did not go as expected. So for the past two years she tried to move again to Saudi Arabia but she was not successful. She also considered to go to Italy via the illegal migration route. She was finally convinced by her family who was strongly against that. She also explored the opportunity to go back working for REST, but the problem there is that they now hire teacher with a diploma, a certificate is no longer enough. After she returned from Saudi Arabia she tried to upgrade her education but she did not manage to complete her diploma studies. Ultimately, she really regrets that she decided to move to Saudi Arabia in the first place. To go there she had to pay 16000 ETB. Half of it came from savings,

167 half from her family. When she came back from Saudi Arabia she had 5000 ETB. Her hope is that she will be able to find a job that meet her expectations. She considers herself as hardworking but unlucky so far. Her salary expectation from the training is 1500ETB/month with increasing of payment over time.

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Annex 2. Training Manual on Technical Skills for Basic Operators

The Annex has been attached as a separate file.

Annex 3. Training Manual on Middle Management

The Annex has been attached as a separate file.

Annex 4. Training Manual for Managers

The Annex has been attached as a separate file.

Annex 5. Training Manual on Soft Skills

The Annex has been attached as a separate file.

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