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Big news for major retailers and their customers

Initially the prospect of developing a handbag line in Africa seemed daunting, but that became Afomia Tesfaye’s motivation in creating FOMI. In early 2011, she made the decision to leave Los Angeles to travel back to her native homeland of Ethiopia with the intention of designing a collection of accessories. After researching the country’s indigenous resources, she discovered a little known fact, that Ethiopia produces some of the world’s finest quality leather. Undeterred by the fact that she had no formal design training, she soon completed a collection of colourful yet sophisticated leather handbags.

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Open a box of Enzi shoes and this is what you’ll read on the inside:
You have not just purchased a pair of shoes.
You have contributed towards the development of sustainable leather production in Ethiopia.
You have invested in improving the livelihoods of skilled Ethiopian factory workers.
You have helped to raise the profile of East African design.
You have added your voice to a growing chorus of people around the world who are ready to see Africa in a new light.
The shoes also happen to be really nice.
Enjoy them responsibly. Read more

China’s was once known as cheapest factory floor on the planet, but in the last two decades its economy has transitioned to become one of the world’s most advanced industrial powers. That means someone else needs to start making all those shoes and sweatshirts, hence all those apparel companies in recent years moving their factories to Vietnam and other cheap spots throughout Asia.

And it’s not just Asia. China’s Huajian Group plans to invest up to $2 billion in Ethiopia in the next decade, turning the country into a shoe manufacturing base for exports to the U.S. and Europe. As the WSJ’s Peter Wonacott reports: Read more

The reason why Ethiopia is cheaper in labor cost than other African countries is because the timing of opening the market and receiving structural adjustment delayed from other countries and because the conservative policy by the national government is effectively controlling the cost. In other words, economic liberalization has just started. International trade is regulated and restricted, and the domestic market is not yet affected by international competition. There are still many state-run companies and the state yet controls telecommunication, finance, and aviation industries. Read more

If you look down from an airplane in the air, you can see innumerable apartment complexes in the capital Addis Ababa and its vicinity. They are lined up in the same shape and the same color. They are residences for low-income people constructed by the national government in order to avoid turning those people inflowing to the capital into slum dwellers. As those residences were built by a Chinese company, the layout looks like a city somewhere in China. A lot of parabolic antennas are installed at windows of those residences in a messy manner.

Addis Ababa has become a totally different city during the recent five years. It is obvious that foreign investments are flown into the country as the economy grows. While Russian shabby taxies are hanging around, we see also Toyota Vitzs and Land Cruisers. Along the road where we see people carrying goats and sheep, there are locally capitalized fancy coffee chain stores and hamburger shops just like Starbucks Coffee. Read more

Currently, these companies are under privatization. Among foreign capitals, Heineken bought out a state-owned beer factory and French Castel bought out a state-owned winery. We also see that investments from private equity funds are coming into factories such as a cement factory and a meat processing factory.

70% of stocks of a truck assembling factory operating from 1970s are owned by Italian IVECO and Fiat. The government has a policy of rapid industrialization and has set up an assembling factory of mobile phones in 2010. The factory started to produce a “feature phone” of Chinese ZTE and dispatched some personnel to a ZTE factory in China for letting them learn its assembling and quality control skills. Read more