The Ethiopian economy is dominated by the agricultural sector where in order to strengthen and develop the economy; industries need to develop hence such type of industry that has a significant contribution in country economic growth is garment industry. Though the sector has a huge potential for developing an economy, the Ethiopian garment industries performance is unsatisfactory due to external and internal problems that are hindering the sectors competitiveness [25].rnEthiopian garment industries need to improve their performance in order to be competitive in local as well as international market. The garments need to be of high quality of international standard, low cost and on time delivery simultaneously. Where the thesis aim is to determine the key performance improvement areas, assess the performance measurement and improvement practices and make relevant recommendations and propose a performance measurement and improvement model for the garment industries.rnTo undertake this research primary and secondary data are collected in thirteen garment industries by using a well structured questionnaire, interviews and personal observation as well as by referring previous research works. From the research it is clear that the garment industries have both internal and external factors that are cause for low performance and competitiveness. Internal factors include poor performance measurement practice, low financial capacity, and low productivity, high cost of production, poor quality garment, poor logistics handling as well as poor customer and supplier relation. The research concludes by proposing a model for the performance measurement and improvement of the garment industries along with the implementation steps for the model.