BY ABEBE WOLDEGIORGIS
Like other developing countries, Ethiopia’s economy makes its foundation on Agriculture. This longstanding practice sustained being subsistence has adverse impact on the nation’s trade balance. That is to say that the country imports more goods and commodities than it exports.
In order to achieve economic growth in the future, it is essential to upgrade export trade through expanding industry and service sectors. To this end, it is essential to import more machinery and other technologies which in turn require more hard currency. Currently, Ethiopia exports agricultural and mining products in the raw form with no or few value addition and such situation made the export products less competent in the global market. Had they been exported with value addition, they would have been enabling the country to garner more foreign currency. In its 10 years perspective home grown economic plan, the government aspires to export more products with value addition instead of exporting in their raw form. Side by side with this, it also aspires to substitute import products so that the nation could save the meager hard currency.
In addition to the agricultural and mining products, Ethiopia is also known providing transport services through Ethiopian Airlines. After the break out of COVID-19, more than a year ago, the Ethiopian airlines changed the crises in to opportunities and boosted its income through the provision of cargo services throughout the world when many airlines were closed.
The energy sector has also become export earner and could attract both local and foreign investors to get involved in energy supplying venture. The government has planned to earn more than one billion Dollar annually in the near future through exporting renewable energy to the neighboring countries. Based on the plan, various measures have been taken to garner foreign currency worth of 1 billion Dollar by the end of 2023. Exporting electric power to Djibouti and Sudan is part of the plan. According to the recent information from the Ethiopian Electric Power Marketing and Business Development Department, in the 2020/21 budget year, it was possible to earn 90.5 billion Dollar from the two mentioned countries.
The report obtained from the Marketing and Business Development Department of Ethiopian Electric Power indicated that in the reported budget year, it was planned to supply 1.4 billion KWT per hour and to earn 80.7 million Dollar. But it could supply 1.6 billion KWT per hour and could earn 90.5 million Dollar surpassing the plan.
As to the report, when comparing the achievement with that of the intended plan, the performance was more than 100 percent witnessing the increment of 9.7 million Dollar or 12 percent achievement. According to the report 1.1 billion KWT per hour was exported to Sudan and 55.48 million Dollar was earned. Similarly, 5.27 million KWT per hour was exported to Djibouti and 35 million Dollar could be earned.
As compared to the amount of earned money with that of the previous budget year, it surpassed by 36.2 percent or by 24.1 million Dollar. The report further stated that the plan for the 2020/21 budget year was to export 695 million KWT electric power per hour to Kenya and to earn 48.6 million Dollar. However, because of the delay in the construction of stretching cable to Kenya, it was unable to export the energy.
Ethiopia’s foreign currency earnings from the energy sector is growing from time to time and by the year 2018/19 it earned 54.9 million Dollar, and by 2019/20 budget year it earned 66.4 million Dollar.
In the mentioned budget year, the electric power generating dams could retain sufficient water to generate power and power interruption was also slowed down. As a result, better income could be garnered from energy export. Since 2012/13, during the last 9 successive years, Ethiopia could earn 603.5 million Dollar from the exported electric power which is encouraging and should be sustained.
The report that focused on annual energy export accomplishment indicated that during the 2012/13 budget year, 34.6 million Dollar was earned and it showed increment in the amount of money and by the year 2020/21, it has reached 90.5 million Dollar. The report further indicated that the growth was fluctuating during the past years. For instance in 2013/14 it was 45.3 million Dollar, in the year 2014/15 it reached 42.8 million Dollar, and by the year 2015/16 EC, it reached to 31.5 million Dollar partially because of the breakdown of power. Since 2016/17, however, the earned Dollar grew by one fold and that time it was possible to earn 73.4 million Dollar and by the year 2017/18, it reached 84.3 million Dollar.
By the year 2018/19 and 2019/20 the earned income showed slightly lower but by 2020/21 it showed increment. In addition to Djibouti and Sudan it was planned to export electric power to Kenya but due to the aforementioned case, it was impossible. But currently, the project which is undergoing to stretch the 412 KM cable line is nearing its completion and it is expected to begin power distribution in the coming Ethiopian budget year. Upon succeeding the intended export scheme in the coming year, earning of 150 million Dollar from energy export will be possible.
The Ethio-Kenya electric power line stretching cost will be covered by the African Development Bank and the World Bank. The line stretching project which enables to export 200 Mega Watt enables the country to earn 8 million Dollar per month.
According to the report, it is intended to enhance the energy export to Djibouti through taking electric power from the wind farm which is under construction in the Somali region. An agreement was reached months ago between Ethiopia and Djibouti for its swift accomplishment.
Sudan is also requesting to enhance the purchasing of electric power and when it becomes operational, Ethiopia’s energy export will be increased.
According to the Ministry of Trade and Industry, Ethiopia earned 3.64 billion Dollar during the nearly completed budget year from export trade in which the share of energy out of this income is 2.4 percent.
While assessing the Ethiopian Electric Power export current achievement of 90.5 million dollar comparing to the plan which was to earn 80.7 million Dollar, some experts raise a question on the accomplishment of one billion Dollar by the year 2023. However, though it needs commitment and concerted effort, it could be achieved with no doubt as per the record of the past year.
The Ethiopian Herald August 22/2021
