Exporters are urging the federal government to establish a new ministry dedicated to the sector as well as form a national export promotion council as a way to help resolve the institutional bottlenecks and market vacuums they argue have been hampering their trade for several decades.
The proposal was floated by exporters and their lobby groups during a three-day discussion event organized by the Ministry of Trade and Regional Integration this week.
“Agriculture is led by the Ministry of Agriculture. Trade is led by the Ministry of Trade. None of these ministries are able to give their full attention to exports, since they are busy with domestic issues in their respective large sectors,” said one discussion participant.
“Ethiopia’s export trade is not being operated by people who are knowledgeable about the export business. It is being run by people who coincidentally became exporters simply to generate forex to finance their import business. There are institutional gaps. This is why Ethiopia’s export revenues haven’t surpassed the three billion dollar mark for decades. Exports cannot improve while the trade is under ministries of agriculture and trade,” said another.
They were among the exporters who urged officials to work to establish a specialized exports institution at the ministry level, while others argued the need to form an export promotion council.
“Establishing a national export promotion council that is comprised of exporters associations, the Foreign Affairs Ministry, and other stakeholders is essential to place Ethiopian products in the international market permanently,” said Edao Abdi, president of the Pulses, Oilseeds , and Spices Processors and Exporters Association.
Yohannes Fanta (Amb.), an official representing the Foreign Ministry’s business diplomacy directorate, endorsed the call for a promotion council, while others had a slightly different opinion.
“Export promotion is being conducted by the Ministry of Foreign Affairs and the Investment Commission. But there are problems in coordination among these institutions and in leading the export sector with know-how,” said Yasmin Woharebbi, a state minister for Trade.
Neither Yohannes nor Yasmin responded directly to the calls for an exports ministry, but Trade officials conceded the need to bolster trade and fix inefficiencies.
“The export sector is stunted by a lack of promotion, meager production systems, weak quality culture, contraband, and other major challenges,” said Kassahun Gofe, who recently replaced Gebremeskel Challa as head of the Trade Ministry.
He expressed hopes that the liberalization of the foreign exchange market will tame the flourishing contraband trade as the gap between parallel and official market rates narrows.
However, exporters say they are struggling to deal with production shortfalls, substandard quality, domestic price hikes, the lack of a packaging industry, difficulties in accessing niche international markets, and growing standard requirements, particularly from buyers in Europe.
“Ethiopia has a huge export capacity. If all these bottlenecks are resolved, revenues can jump to between 20 million and 30 million dollars annually,” said Kassahun.
