Unleashing the Potential of SMEs in Ethiopia (Cluster Programmes)

Merkato Leather Footwear Cluster

The leather footwear sub-sector accounts for 72 percent of all leather and leather products enterprises in Ethiopia, and is dominated by the MSEs. Merkato (Addis Ababa) leather footwear cluster, which has at least 600 registered and un-registered enterprises producing more than 6 million pairs of shoes annually, accounts for over two-thirds of all micro and small-scale footwear manufacturers in the country.The only way to survive this threat is through reducing the costs and improving the design, quality and marketing systems. Increased business as well as vocational skills, upgrading of technology, better designs, better shop floor practices, bookkeeping, improved working premises, easy access to credit, quality awareness and joint actions on the business operations of common interest will help the enterprises in becoming more competitive and thereby ensuring their survival and growth.

Addis Ababa Ready-made Garments Cluster

Addis Ababa ready-made garments cluster, with 43 small and medium scale enterprises and an estimated sewing capacity of 5000 machines, is the only such cluster in Ethiopia. The major products include basic T-shirts, sports wear, uniforms, gents’ suits etc largely for domestic market. Private sector enterprises, which account for 38 out of 43, have come up only during the last decade. This cluster has been an important source of employment for women.

Guleli Handloom Cluster

Ethiopia has a long and traditional history and competence in production of delicate and intricately designed hand woven fabrics on traditional looms. The estimated number of handlooms in the country is to the tune of 290,000 and more than 60 percent are located in rural areas. There are around 20,000 looms in Addis Ababa city alone and most of them are located in the sub-city of Guleli. This cluster of handlooms (Guleli), the biggest in the country, produces fabrics for traditional Ethiopian dresses, bed sheets and curtains for domestic market. However, some private entrepreneurs working with groups of weavers on sub contracting basis are producing and exporting a variety of high value added home furnishings, although in limited quantity.

Mekelle Metal and Wood Enterprises Cluster

Mekelle (headquarters city of Tigray region) metal and wood enterprises cluster, with at least 600 micro and small enterprises, accounts for 50 percent of all metal and wood enterprises in the Tigray region. The major products include a wide range of metal and wooden products: household utensils, office and household furniture, construction materials like window grills and agriculture equipment.

Expected Outputs

The cluster development programme, in combination with the activities to improve the institutional capacities in general and with the continuation of established training programmes, provides appropriate conceptual framework and tools to address these issues on a cost-effective and sustainable basis; and its implementation will have positive impact on the viability and competitiveness of the enterprises in the highest priority sectors of Ethiopian economy and thereby addressing the problems related to sustainable agriculture-led industrial development, poverty, unemployment, foreign exchange earnings and women empowerment.