Ethiopia’s exports were 3.62 billion USD in 2023/24, while imports amounted to approximately 13.6 billion USD, resulting in a trade deficit of 9.98 billion USD. Bridging this gap requires strategic and sustained efforts.
Speaking to The Ethiopian Herald, Eastern Africa Grain Council (EAGC) Executive Director Gerald Masila stated that Ethiopia has a significant potential to diversify its foreign exchange earnings by expanding exports, particularly in grain value chains. Increasing exports of pulses, cereals, and grains could bring substantial income to the country.
To achieve this, Masila stressed the importance of addressingseveral issues, including harmonizing trade policies, standards, and specifications for commodities, setting prices, and establishing grading standards. He pointed out that Ethiopian standards must align with those of the wider African region to increase export volumes.
Masila also suggested opening up transaction processes and utilizing local currencies for trade conversions to alleviate the foreign exchange crisis. He mentioned that the price differential is currently pushing Ethiopia out of the market for some commodities, with supply and demand determined by price discovery. Key bottlenecks include quality specifications and safety, logistics and transportation costs, and product grading and standards, all of which must be addressed to correct the trade imbalance.
Ethiopia has strong potential in grain and pulse production and has been exporting these products to the Eastern African region and beyond. “We are working with stakeholders in Ethiopia to tackle challenges in the value chains, from production to post-harvest handling and exporting processes,” Masila stated. “Addressing these bottlenecks is crucial for the success of exporters.”
He noted that Ethiopia has increased its exports to the region, particularly through the northern trade corridor via the Moyale border. The African Continental Free Trade Area (AfCFTA) presents significant opportunities, especially for farmers. Masila recalled Ethiopia’s export of over 200,000 metric tons of maize to Kenya during a drought crisis, which was a critical move for regional integration and opening Ethiopia to global markets.
Trade and Regional Integration Minister Kassahun Gofe (PhD) emphasized reducing reliance on imports by promoting locally produced goods. He highlighted the need to improve product quality and change the perception that imported goods are superior for countries like Ethiopia, which have a chronic trade imbalance.
The government has been working to improve product and service quality to support import substitution and increase local production. Ensuring quality and standardization is a priority, as it forms the foundation for competing in the global market and driving economic growth and development, the minister remarked.
BY TSEGAYE TILAHUN
THE ETHIOPIAN HERALD SATURDAY 31 AUGUST 2024
