CHECKERED shirts for American chain Gap. Slate leggings for Swedish store H&M. Twill shorts for Germany’s Tchibo. They are among a growing list of clothes being stitched together for big brands in Ethiopia.

As labor, raw material and tax costs rise in China — the world’s major textiles producer — the “Horn of Africa” is scrambling to offer a cheaper alternative, and go up against established low-cost garment makers like Bangladesh and Vietnam.

Still in its early days, most clothing companies sourcing production in Ethiopia are testing the waters with small volumes. But the government is working hard to attract their business with tax breaks, subsidies and cheap loans. The landlocked nation is also about to open the final stretch of a 700-km electric railway to Djibouti’s coast.

This is part of a drive to turn a nation that is among the poorest in Africa into a manufacturing center.

There has been some progress; foreign investment in the textile industry has risen from 4.5 billion birr (US$166.5 million) in 2013/14 to 36.8 billion birr in 2016/17, according to the Ethiopian Investment Commission, a government agency.

“This is a huge success,” Arkebe Oqubay, a prime ministerial adviser directing the industrialization drive, said during the inauguration of an industry park in the northern Ethiopian town of Kombolcha this summer. “The challenge now is to bring the world’s biggest companies into the country.”

Some have already arrived, most of them sourcing some production locally, like Gap and H&M, but few building factories themselves.

Those to set up factories this year include U.S. fashion giant PVH, whose brands include Calvin Klein and Tommy Hilfiger; Dubai-based Velocity Apparelz Companies, which supplies Levi’s, Zara and Under Armour; and China’s Jiangsu Sunshine Group, whose customers include Giorgio Armani and Hugo Boss.

French retailer Decathlon and over 150 companies from China and India will begin sourcing production from Ethiopia soon, said the investment commission.

However, while Ethiopia is moving faster than its continental rivals, there is a long road ahead. Logistical, bureaucratic and cotton quality problems are threatening its ambitions and there are no guarantees it will ever be able to compete with the big global players.

The gulf in textiles exports is huge; Ethiopia’s totaled about US$115 million in 2015, against Vietnam’s US$27 billion, Bangladesh’s US$28 billion and China’s US$273 billion, according to the World Bank’s latest figures.

Ethiopia’s road link with the port in Djibouti is outdated and congested in many parts and, together with the limited capacity and dense bureaucracy of its customs service, slows companies’ supply chains. (SD-Agencies)