Ethiopia’s once rapidly growing economy is taking another hit tied to its yearlong war, with global clothing manufacturer PVH Corp. saying it is closing its facility there because of the “speed and volatility of the escalating situation.”
PVH, whose brands include Calvin Klein and Tommy Hilfiger, has been a marquee occupant of Ethiopia’s model industrial park in the city of Hawassa, where Africa’s second-most populous country has made clear its aspirations of rapid, Chinese-style development.
PVH said it is closing its facility after a planned sale was disrupted by the escalating situation in Ethiopia but added it remains committed to its third-party manufacturing partners at the Hawassa park. The company’s statement, comes two weeks after U.S. President Joe Biden announced he would cut Ethiopia from a trade program, the African.
Growth and Opportunity Act, because of “gross violations of internationally recognized human rights.” The sanction goes into effect on Jan. 1 2022
Warnings about the economy have been growing as Ethiopia’s government pours resources into the war. In its World Economic Outlook report last month, the International Monetary Fund said projections for 2022 to 2026 “are omitted due to an unusually high degree of uncertainty.”
Ethiopia’s war and the many reported atrocities on all sides have led some in the business world to press Prime Minister Abiy Ahmed and his government for a cease-fire and humanitarian access to the blockaded Tigray region, echoing efforts by envoys from both the U.S. and African Union.
Thousands of people have been killed as Ethiopian and allied forces fight the Tigray ones who long dominated the national government before Abiy came to power in 2018. The conflict has been marked by gang-rapes, forced expulsions and manmade famine.