Thursday, November 30, 2023
BusinessExport euphoria ends, earnings fall

Export euphoria ends, earnings fall

The government misses target

The past two years’ overjoy in the export sector has come to an end, with revenues in the last five months showing a modest decline from last year.

Officials, including Prime Minister Abiy Ahmed, praised the industry for generating a record four billion dollars in export earnings last fiscal year. It is the second major source of forex for Ethiopia, next to remittances, which generated seven billion dollars during the last fiscal year, according to the central bank.

During the first five months of the current fiscal year, Ethiopia only made USD 1.5 billion from the exports of goods, USD 90 million less than the amount registered during the same period last year. Commodity exports were USD 371 million less than what the Ministry of Trade and Regional Integration had targeted at the start of the fiscal year for the reporting period.

The key causes for the drop in export revenues include the ongoing conflict between Russia and Ukraine, which has caused a crisis on the global market, and the rising dominance of the black market when compared to the official ones, according to Kumneger Ewunetu, the Ministry’s director of communications.

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The ministry is implementing new measures to strengthen market linkage and integration as a way to combat the challenge the market is experiencing as a result of the global market crisis, according to Kumneger.

Even though most items have seen a decline in export performance, the Ministry is quite concerned about the underperformance of agricultural products like pulses and oilseeds. A year ago, the Ministry was forced to take administrative actions against exporters of these commodities after learning that traders had been hoarding the goods.

“Even on Khat, there have been the same problems and was being traded through illegal channels,” Kumneger said.

Agricultural products contribute over three-fourth of the country’s exports. While manufacturing contributed almost 12 percent, mining accounts for 6.3 percent of the total exports.

Addressing the Parliament a few weeks ago about the performance of the National Bank of Ethiopia, Yinager Dessie (PhD), governor of the central bank, said that the country’s export performance, mainly on gold and a few agricultural commodities, has been declining lately. His report revealed that only exports of coffee and horticulture were showing good performances this year.

The Ministry announced last month that regional trade and market development bureaus aren’t to be the final body to approve exporters before they ship their commodities, a trend that has been existed for a long time.

“The exporters now have to get final approval from the Ministry. We are implementing this together with the Ethiopian Customs Commission,” she said. “No regional bureau is allowed to give approval.”

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