Ethiopian Review

By Kirubel Tadesse

Bucking the very positive trends of the past few years with a shocking underperformance, export revenues are expected to fall over a billion dollars short of target at the end of the budget year, an official report has indicated.
The global economic slowdown has slashed demand for most of the export items Ethiopia ships overseas, while the nation’s biggest export product, coffee, has been affected by hoarding, the Government explained.
The Government also took its share of the blame by stating that it was not efficient in looking to other markets for its exports when previous buyers slashed orders.
Girma Birru, Minister of Trade and Industry, explained to Capital that exporters are being exempted from the power shedding so that revenues do not fall further: “For exporters with confirmed export orders in May and June, power is to be given with out any interruption.” Girma said other export companies were advised to halt operations for maintenance during the remaining months.
The Government has maintained an ambitious agenda so far managing to achieve consistent double digit GDP growth, while export growth was even higher.
Girma insists that double digit GDP growth will be attained, but the only realistic goal he sees for the export sector this year is to try and match the revenues earned last year.
The target for the fiscal year is 2.56 billion dollars of exports, which the Government now says it only earned 40 per cent of during the first nine months. 1.02 billion dollars was received from exports, which is only 56 per cent of the nine months’ performance target. Revenues from the first nine months should have been at least 1.8 billion dollars.
The sector’s performance averaged around 4.5 per cent per month in the first nine months, one expert explained to Capital, adding that it indicates the final annual performance is likely to be around 53.4 percent of the target.
According to the expert, the first nine months of exports are indicating 1.33 billion dollars for the whole year, which means the performance will fall short of even last year’s by over 170 million dollars.
However, the Government hopes it will attain the 1.5 billion dollars it made last year.
That 1.02 billion dollars of export revenue was secured from more than 34 items, the report of the Ministry of Trade and Industry said to parliament’s standing committee last Friday.
Coffee exports during the reported period fetched 251 million dollars, an amount 53.5 per cent lower than the forecast figure. The Government is pointing fingers at the exporters it has already taken legal measures against, revoking the licenses of six exporters and prosecuting some of them before court. The Government alleges the coffee was being hoarded until prices rose, and in order to derail the newly established Ethiopian Commodity Exchange.
Over 229 million dollars was secured from oilseeds, while Khat ranks as the third most valuable export item, making up 10 per cent exports.
Mined exports, such as gold, have shown a slight increase, earning over 68 million dollars compared to 64.4 million dollars last year.
Sheik Mohammed Hussein Ali AL-Amoudi’s MIDROC Gold is the leading gold exporter in Ethiopia.

(Capital)