Ethiopia’s export trade performance is showing positive momentum, with a notable increase in revenues and a shift in export composition. In the first five months of the 2024/25 fiscal year, Ethiopia’s export revenues reached USD 2.63 billion, surpassing targets and demonstrating a 102.09% increase compared to the same period in the previous fiscal year. Agriculture remains a dominant sector, contributing 50.42% to total revenue, while mining, manufacturing, and other electrical products also play a significant role. Key export drivers include gold, coffee, electricity, and livestock.
Data indicates that Ethiopia’s annual export revenue until last year was barely over three billion Dollars. This export revenue has started to show a significant change in the 2024/25 fiscal year. In the last nine months of the fiscal year, exports have reached USD 5.35 billion.
According to the Executive Director of Communications at the Ministry of Trade and Regional Integration, Wondimu Flate, in the 2023/24 fiscal year, exports amounted to USD 3.52 billion that have reached USD 5.35 billion in the nine months of the 2024/25 fiscal year. This is an increase of USD 2.79 billion compared to the previous year.
The Executive Director stated that Ethiopia’s export growth has been high at the sectoral level; the implementation of the agricultural products plan is 115%. While the implementation of the manufacturing products export is 57% of the plan, the implementation of the mining sector has reached 370% of the plan. In addition, the implementation of electricity and other export products is 127%.
He pointed out that the performance has shown a significant improvement from the previous performance; it is an indicator that Ethiopia’s export earnings can continue to grow. While explaining the reasons that contributed greatly to this improvement, he cited the macroeconomic reforms that the government has put into full implementation as an example.
Recalling that exporters have been able to obtain foreign exchange, he indicated that the creation of a unified and streamlined foreign exchange management system that regulates the black market that has been putting pressure on foreign exchange is one of the reasons for the record.
Another reason is that encouraging exporting investors with various options and providing many options, as well as carrying out strong export expansion and promotion activities at the level of trade and regional integration, are also among the reasons. He said that the country’s exporters are allowed to participate in international trade fairs, exhibitions and various markets.
The Executive Director noted that the main contributor to the success of the export trade this year was foreign exchange earned from gold trading, noting that an estimated USD 2.66 billion was earned in the first nine months. The main contributor to this was the significant increase in the amount of gold directly received by the National Bank from traditional gold producers.
According to Wondimu, the second largest source of foreign exchange earned from coffee trading. This has seen a significant change compared to the previous year. He stated that the significant increase in the demand for Ethiopian coffee in the world and the increase in the number of countries buying it played a role.
The Executive Director said that there is no question that much needs to be done to maintain the export performance achieved this year. If it is possible to encourage investors, eliminate illegal checkpoints, and increase quality inspection capacity to maintain product quality, it is possible to maintain existing markets and create new markets on a regular basis.
“As skills training improvements are being made; national capacity is growing,” Wondimu said; and noted that both the business community and the producers and farmers involved in the manufacturing industry must work with knowledge and skills.
He said that this is the information age, and negotiations and discussions are conducted digitally. Therefore, to be competitive, it is necessary to know the technology at the level required by the time. It is necessary to increase trade and business capacity through trainings provided individually or as a country.
Wondimu said that Ethiopia’s export basket should attract more products; to do this, it is necessary to increase the capacity to produce in quality, quantity and variety. For this, the Ethiopian National Quality Village will play a major role.
Through the Ministry of Trade and Regional integration, manufacturers and exporters, as well as domestic traders and industries in general, are playing roles in their respective sectors. No doubt that there is a need to build capacity not only in terms of the growth of export trade but also in terms of the production of substitute products, he said.
Molla Alemayehu (PhD), a senior researcher at the Ethiopian Economic Association, said that while export revenue has increased compared to the past, it should not be forgotten that the population is also increasing. The market situation is bound to expand from time to time. Since it is the information age, technology will also have its impact. The number will inevitably increase in the future; although income is increasing, it cannot be said that the desired amount is being exported.
He said; “Our country’s investors and producers engaged in export trade are very weak compared to their counterparts in other countries. Stakeholders need to design and implement a sound strategic plan to compete with the world.”
“We are still far behind,” said the senior researcher, adding that much work needs to be done to improve income. The country has a lot of potential. Especially in relation to agriculture and agricultural-related matters, it is necessary to modernize agriculture; expand exports, which are mainly dependent on coffee and certain products, and become more competitive, mainly by increasing quality and value.
The difference that a country has a better economy is when its export trade is greater than its import trade. This is when the trade balance is considered healthy. It has not been possible to balance or somehow bring this closer, he said. This is because of the backwardness of export trade and lack of competitiveness. He explained that the main reason for this is that, in terms of the time, export producers are far behind in terms of technology and work to compete at the global level.
According to the senior researcher, a roadmap should be prepared and a well-designed plan should be implemented to increase foreign exchange earnings from export trade. The government should help manufacturing companies engaged in export trade to improve their technology and build their capacity. It is necessary to work to achieve more by supporting financial provision, technology, and knowledge transfer.
Frezer Tilahun, Assistant Professor of Economics at Haramaya University, said; “The fact that the price of what was sent last year and what is being sent now has doubled without increasing in quantity or quality, and the difference is related to inflation, should not be taken as a sign of pride.”
Explaining the reason why he thinks the increase in export revenue is not something to be proud of; first, what was sent abroad differently? The increase in export revenue, including the price of products in the world, should not be taken as an indicator of growth.
“The price of coffee is said to have increased at a rate not seen in the past 48 years,” he said. He also indicated that the reason for the sharp increase in coffee prices is that Brazil and Colombia have been affected by the lack of rain and Ethiopian coffee, especially in the US market, has been selling at high prices. The replacement of Brazilian coffee with Ethiopian coffee should be done to make the situation sustainable and to gain new customers.
He added, “The gap between the income earned from exporting and the cost of importing products is still very wide. Everything that is exported has become limited. There are machines that are imported at high prices, including shoes and clothes; all this requires high costs.”
Ethiopia exports coffee and sesame. What will happen to Ethiopia if problems arise that negatively affect these products? There is a problem of product diversity. Exporting electricity is a different option. It creates product diversity. If the rains stop, the sale of power supply will not be interrupted. Therefore, the number of types exported should be increased side by side. Income should not fluctuate while it rises and falls; it is necessary to work to export things that do.
Another thing is that there are so many products that can be produced domestically. For example, there should be no reason for a country that bases its economy on agriculture to import juice and milk.
A country cannot live in isolation from the world. But it should only import products that are expensive to produce domestically; cheap to import. There is no need to import products that are easily produced domestically, he said.
He pointed out that there is a need for restrictions on imported products; when income decreases and expenditure increases, a meaningful change can be brought to the economy. He also emphasized that the type, quality and quantity of products exported should be increased.
BY BACHA ZEWDIE
THE ETHIOPIAN HERALD THURSDAY 3 JULY 2025
