Recently, the Ministry of Trade and Industry (MoTI) disclosed that it is applying a new export contract management system to advance foreign trade through averting business frauds such as mispricing, misinvoicing and breaking of contract.
The system is to consolidate regulations and monitoring schemes on export trade side by side to the national economic reform that proposed to improve homegrown economy, ease of business doing, and economic regulation revision. These measures would help to prevent various illegal businesses and ensure fair and authentic exportation that can help the country to get the needed benefit from foreign trade.
The system had been reviewed and discussed by stakeholders before it has become functional in October. Exporters and oilseeds associations have been actively deliberating on the new system. The system obeys exporters to legally register their products. This would create competitive export market and help to nurture competent legal exporters. Under the inception phase, the system has been applied on coffee, white bean and sesame products export businesses, according MoTI State Minister Ambassador Misganu Arga.
The contract process for coffee is undertaking through Coffee and Tea Authority and the contract to the rest products is via the Ethiopian Commodity Exchange. The ministry organized a taskforce to apply the system, to this end. It has been suspending licenses of exporters that are engaged in illegal trading and mispricing. The absence of the system had been affecting country’s economy by escalating inflation in addition to cutting the income of the nation. Over the past three months the ministry has secured about 95 million Birr increment from export following the revision.
The country has also been undertaking various economic reforms to improve its economy and investment. Assisting business in technology, capital registration, providing loan for trading, advancing taxation business contract are among the reforms that the nation hopes to attract more business. Consequently, the nation improves its rank on the world in terms of ease of business doing, according to World Bank. Not only this, the economic reform also paid the nation back in terms of increased export.
The quarter year report of the MoTI indicated that it has witnessed 95 million USD increment from export revenue compared to last budget year in the same period. Totally, the nation secured about 723 million USD from export products sent to 128 countries including Netherlands, Somalia, USA, Saudi Arabia and Germany.
The report indicated that export products including incense and gum, cereals, cut flower and electric power sale have seen remarkable increment. Among others the operation of the new export contract management system played significant role to the better progress, according to Ambassador Misganu.
Besides, the country is also working to expand market through participating in various international business expos and workshops. On October 28, 2019 the ministry held Trade Enhancement and Facilitation workshop. On the occasion, Ambassador Misganu said Ethiopia is accelerating economic reform aimed at achieving sustainable development in all sectors.
The government is conducting reforms to make the country become part of the regional and world trading system. The ratification of Ethiopia’s participation in the African Continental Free Trade Area (AFCFTA) and the restarting of the accession negotiation to the multilateral trading system of the World Trade Organization would be a witness to this fact, he stated.
Ambassador Misganu expressed that Ethiopia has the vision to build the trade brain of the country at the ministry who lead negotiations based on practical knowledge drawn from experienced countries. The ministry can benefit from the technical assistance provided by the European Union and other development partners to ensure the successful integration of the country into the regional and global trading system. This will help to improve the business environment for exporters.
The country is also preparing to host World Export Development Forum (WEDF) that will take place in 18-22 November. The forum will bring together over 1,000 business leaders, policymakers and trade development officials to address international business competitiveness issues and profile international investment in the country. WEDF will take place during Africa Industrialization Week, with sessions designed to help business make the most of the newly-ratified African Continental Free Trade Agreement, the International Trade Center official website indicated.
Therefore, advancing the national export system is crucial to get the needed benefit from the growing interest of international market and investment. To this end, the government ought to have strong commitment to ensure the ongoing economic reform beyond expanding the new export contract management system at grassroots level. Furthermore, improving the quality and quantity of export products is significant to secure more income that can revive the steady economy.
The Ethiopian Herald November12, 2019
BY YOHANES JEMANEH
