Ethiopia has set up a landmark fund in collaboration with UK and Germany to save thousands of jobs in its textile and garments industry and help to support the country’s economic recovery from COVID-19. With an initial investment of $6.5 million, the partnership aims to safeguard a critical industry and protect the livelihoods of those working within it.

Through the fund, textile factories in Ethiopia’s industrial parks can apply for wage subsidies – similar to the furlough schemes operating in many countries including the UK and Germany – and incentives to reward businesses that are able to adapt in response to COVID-19. The funding will kickstart the facility and the partnership may further expand its reach through additional support in the coming months.

The wage subsidy will cover a portion of total employment costs for textile factory workers in Ethiopia’s industrial parks. The fund will protect jobs, enable textile factories to keep running and support factories to build back better. Meanwhile, the innovation incentive will reward factories that have been able to demonstrate their ability to make their businesses more resilient in the face of COVID-19, including through the development of new production lines and partnerships