BY ABEBE WOLDEGIORGIS
Illegal trade which is growing from time to time and going on various forms is critically affecting the economy. In the recent workshop which took place in the city, participants explained that, the trend might endanger the nation’s endeavor for industrialization.
According to Musie Mindaye, the Trade Relation and Agreement Director under the Ministry of Trade and Regional Integration said that, in relation to import and export trade illegal trade is aggravating.
He mentioned the illegal trade of cattle as the case in point. In addition, pulses are illegally exported to the neighboring countries. On the other hand, in the import front, various industrial products are illegally imported and critically affect the local industries market.
Therefore, as to him, the problem is worrisome and needs immediate remedial action. Amin Abdela, a macroeconomist said that, illegal trade manifests itself in various forms. The nation lost huge amount of money both by illegal trade and money laundering and it is growing from time to time.
The nation, only in the last five years has lost USD 70 billion due to falsified documents utilized both in export and import trade. In relation with import and export trade providing documents which explains less profit and increased expense are among the cheating system. Capital flight also is harming the nation’s economy.
As to Amin, cyber businesses are also undergoing without the knowledge of the government and because of these and other malpractices, the illegal trade volume is surpassing the legal form of trade.
Particularly bulky amount of commodities are imported and exported through contraband but the arrested illegal goods explained by revenue authority are portion of it.
He further said that, the revenue authority inspects contraband items in selected checkpoints and focuses only on second-hand clothes which are carried by ordinary citizens, but ignored contraband goods transported by containers. This implies that how the inspection system is weak.
Amin further said that, in the past many worried that if Ethiopia joined the free African Trade and the COMESA agreement, will be put in the disadvantageous position because the local industries would be unable to compete with the entry of excessive products to the market which sold in cheap price.
But now it is proved that above all illegal trade is a threat to the nation’s Economy and in the long run, it may put the country to run out of industry. Currently closing down of the number of manufacturing is growing from time to time because of unable to compete with other products excessively found in the market.
In addition to electronics, basic necessities such as medicines are imported illegally. Hence the matter is not only an economic issue rather it touches the whole aspect of the society day to day living.
In the import sector more goods enter here illegally than a legal one, therefore, some are inclined towards engaging in illegal trade than the formal one.
The manufacturing sector is struggling to survive due to shortage of hard currency and inputs whereas, industrial products with better quality imported by illegal trade are engulfing the local market. As the result, the industries are found themselves in a precarious situation.
When local manufacturing faces crises, the impact on the whole economy is not an easy and in the long run the government might lose a huge amount of income which it gets in the form of revenue.
Currently, the capital flight in Ethiopia can be categorized as huge and reached the highest level in Africa. The huge gap in the exchange rate of Birr against the Dollar in parallel market proved this. Currently, one Dollar is exchanged by 52 Birr in banks while 82 Birr in the parallel market. He also said that in Turkey one Dollar is exchanged with 110 Birr.
Yohanes Woldegebriel is a legal professional asked whether the private sector is involved in the illegal trade, its implication and what would be the solution, in his response he said that, illegal trade is not simply an illegal act rather it shows the morale decadence prevailed in the society.
Traders who are in low moral level intentionally creating man made dis parity between demand and supply. Some of these traders are legal and by creating gap between demand and supply create conducive situation to dump their illegally imported commodities in the market and benefit a lot.
When there is high demand and shortage of supply consumers do not bother whether the goods are legally imported or not and just simply purchase it. As the result, more traders involve in illegal business as some government officials also cooperate with them.
The involvement of corrupted officials in such illegal practices aggravates the situation. The officials facilitate illegal acts through the provision of trade license, weakening boarder security, distorted tax payment and others which intern exacerbates immorality.
It is the government which has the mandate to control and manage immoral acts therefore; the government must be organized by people with high esteem and free of corruption and with professional integrity. Unless and otherwise the situation is reversed to the better, illegality will be rampant.
As to Yohannes, unreasonable tariff imposed on commodities also push legal traders to involve in illegal trade.
Musie on his part said that, the managerial mal practice witnessed in the border areas facilitates illegal trade. “Frankly speaking the border areas administration is heavily indulged in corruption hence, resolving the problems should be a priority agenda”.
He further said that, the port services that the nation purchases from neighboring countries are vulnerable for corruption and illegal activities. For example, commodities imported through port of Berbera are more illegal and very few of them are legal. The absence of peace in the neighboring countries and doing business without trade agreement are responsible for the growing illegality.
He also said that even though there is special status agreement between Ethiopia and Kenya it is not implemented as the result, illegality has been rampant. There is special agreement with Somalia, it is not implemented and this again, aggravates the situation. As compared to other countries boarder administration of Ethiopia is very weak. But the Kenyan is better than Ethiopia.
The other thing that makes the border trade inspection hard is that Ethiopia has vast territory bordering the neighboring countries. Various efforts are tried to resolve the problem but still unable to reach to the long lasting solutions because mostly the measures are tentative carried out in the form of campaign.
As to Amin, how contraband trade is conducted is known by the officials but due to the rampant corruption prevailed in the government structure, the problem is remains untouched therefore, resoluteness is essential in the part of the government. He also said that corruption and illegal trade have correlative relation and breaking it is vital.
To control illegal trade utilizing the INSA and Ethio telecom technology is essential. Illegal traders and money launderers have connection with other bodies locally and outside hence, by investigating the matter taking measure should be looked as a way out. Had it not been the transportation is costly, the nation would have been overwhelmed by excess illegally imported commodities.
Malpractices and immoral activities rampant in checkpoints make the controlling system very weak hence, appointing responsible persons by removing the corrupted one is vital. To bring a durable solution when the contraband item was found in hide after it passed through the first checkpoint, taking measures on the staffs working in the first checkpoint is necessary. Illegal traders knows in which checkpoint strong inspection put in place, therefore, when illegally transported commodity is found punishing the staffs working in the checkpoint is vital. There are also staffs who let the items pass through negotiation by taking bribes. But to resolve the problem commitment on the part of the government is essential.
THE ETHIOPIAN HERALD SUNDAY EDITION 24 JULY 2022
