By Hayal Alemayehu

Ethiopia emerged as one of the leading footwear exporting countries in sub-Saharan Africa (SSA), according to a report the US International Trade Commission released this week.

The report, which focused on SSA's export performance during 2002-2006, included South Africa, Kenya, Zimbabwe, Cape Verdi and Ethiopia as the leading footwear exporters in the region.

 Together, these countries accounted for 80 percent of SSA footwear exports, according to the report entitled: Sub-Saharan Africa: Factors Affecting Trade Patterns of Selected Industries. Of SSA exporting countries, Kenya registered the largest absolute increase in footwear exports during 2006-2008, while Ethiopia followed with an increase of USD 2.9 million footwear exports during the same period, the report said.

"Ethiopia established a leather products training institute in Addis Ababa, where students receive six months of training in various shoe-making skills. The institute has supplied workers to the three footwear factories that have opened in Addis Ababa during 2006-07, reducing the start-up training costs for these companies," the report emphasized how Ethiopian footwear industry grew. "Footwear and apparel exporters also benefit from reduced freight rates when using government owned companies."

 "Estimate of the number of shoe factories in Ethiopia vary," said the report. "A recent report, however, stated that currently more than 30 new shoe-manufacturing industries are operational, employing more than nine thousand workers."

Although Ethiopia has the largest livestock population in Africa and the tenth largest in the world, the report indicated that the competitiveness of the country's footwear sector had been hampered by low quality hides, skins, and finished leathers as a result of non-commercial slaughtering and handling conditions coupled with obsolete tanning, finishing and production technologies.

Recently, Ethiopia's footwear sector has launched an initiative to improve the production of hides and skins through training program and projects to reduce defects and to enhance and create linkage between tanners and footwear producers, the report indicated.

Although state-owned footwear facilities still account for a significant share of Ethiopia's footwear sector, the number of privately-owned operations has grown, according to the report.

"The entry of high performing, innovative private enterprises since 2001 has reportedly led to improvements in the quality of products and increased efficiency of marketing and management," the report said." Such private enterprise activities have likely helped to strengthen and expend Ethiopia's footwear and exports."

The report indicated that private Ethiopian firms had been building new large factories in industrial parks developed by the government and plan were underway to establish additional factories and to train employees to begin the mass production of high quality shoes for foreign markets.

Business relationship developed between Ethiopian footwear producers and companies in Europe, particularly Italy, had likely contributed to the surge in Ethiopia's footwear exports to Italy during 2002-06, according to the report.

"A leading Italian producer currently sources footwear from three new shoe companies in Ethiopia," reads the report. "Imports from Ethiopia complement the Italian company's production in Italy and are sold under the company's brand names throughout Europe."

"The Ethiopian shoe industry has benefited from the guidance of Italian technicians dispatched by the company," the report further said. "There have been rapid improvements in Ethiopian productivity. Some Ethiopia footwear manufacturers import high quality soles from Italy, Spain, and other European countries while others use Italian machinery and technology to produce the high quality soles in Ethiopia."

According to the report, men's shoes account for the bulk of Ethiopia's footwear exports. Production of casual men's and women's shoes is also being developed and is expected to account for a significant share of footwear exports sooner.

The report also highlights growth witnessed in Ethiopia's textile, coffee, and aviation sectors, among others.

"While SSA textile exports increased modestly during 2002-06, five countries, namely Mauritius, Tanzania, Kenya, Lesotho, and Ethiopia, experienced significant growth at rates of at least 100 percent," the report said. "Mauritius realized the largest absolute increase during the period, with textile exports increasing by USD 25 million during 2002-06."

Regarding Ethiopia's coffee export, the report indicated that the combination of good rainfall during the past three years, following a severe drought in 2002-03, and a recovery in world coffee prices had benefited the Ethiopian coffee industry immensely.

Concerning Ethiopia's aviation industry, the report lauded the performance of Ethiopian Airlines. "Ethiopian Airlines's ability to reliably service its market in connection with the flexibility it achieved through the Open Skies agreements led to plans to expand and upgrade its fleet," said the report. "In 2004, when Ethiopian Airlines signed an agreement for at least five new Boeing 787 Dreamliners, it become the first African carrier to be a launch customer for these jets."

The report indicated that in general the value of global SSA exports increased from 2002 to 2006 in nine of 11 industries it investigated.