According to Revenues Commission, in the last five years (2014-2017), Ethiopia has seized 3.16 billion and 537 million Birr contraband imports and exports respectively. Since recently, the seizure of contraband has become an everyday reality. As it is impossible to curtail contraband with the activities of law enforcing bodies alone, strengthening a coordinated prevention system with the active participation of the public at every level is essential.
The contraband trade is significantly reducing the government’s revenue as goods are transferred illegally in to or out of the country without the payment of customs duty and taxes. This is also one factor for widening up income inequality among citizens. The eventual outcome of the revenue lost hampers development programs, said Adanech Abebe, Minister of Revenue and Customs during a recent discussion with stakeholders. She also added that tax fraud, contraband, and illegal trade have become major challenges in institutionalizing fair competition in the economy.
Besides reducing government revenue, its effect on local trade and investment, as well as the availability of hard currency, is immense. Then again, contraband has also caused several political and societal causalities. Contrabandists and their associates have caused displacement and several deaths on people. Hence, she underlined, developing an integrated controlling mechanism is the best way to deal with the issue. “Even if the prevention and control systems are put in place, government offices’ inability to carry out their responsibilities properly still remains a major challenge. This is why the government is striving to improve the participation of the public and local communities in curbing the rising contraband activities in the country.”.
The commitment of security professionals and other concerned bodies is fundamental to control contraband, said Zewde Tefera, State Minister of Revenue and Customs. Contraband, as an illicit act that has a negative impact on the socioeconomic development of a country, taking effective preventive measures is also timely to minimize its adverse effects. Previously, the responsibility to prevent contraband rests only with the Ministry of Revenues and Customs, but now the situation has changed.
Manufactured goods such as electronic goods, garments of various kind, perfumes, cosmetics, drugs, armaments, and others are frequently seized contraband imports. Sudan, Eritrea, Kenya, and Djibouti are identified as the main routes to transport these contraband good in and out of the country, Zewde stated. Coffee, which is the country’s chief export item, livestock, cereals, animal skins, fuel, and others are some of the goods smuggled out of the country.
These goods are smuggled to the aforementioned neighboring countries. To transfer these goods, smugglers cross the land borders of the country between Somalia, Sudan, Djibouti, Kenya, and Eritrea, and use routes that are not under the control of the federal police. Jigjiga, Harer, Diredawa, Gedamaitu, and Adama are identified as major centers for storing and trading contraband goods. Addis Ababa is also the target market for the imported contraband. Contraband prevention approach involves a wide range of actors such as government, regional and local administrators, and the community. And the coordination efforts have to be strengthened.
The government is working on a new strategy to curtail contraband. It is also noted that encouraging legal trade alone borders can also be taken as a strategy to control border trade. The strategy would support to fulfill the commodity demands of people alone borderlines, and hence help reduce contraband. By allowing border trade with Somalia, Sudan, Kenya, Eritrea and Djibouti, the government would be able to collect a significant amount of revenue.
Herald January 24/2019
BY TSEGAYE TILAHUN
