Export Paralysis

comparative six-month performance of export items,2012/13 and 2013/14 fiscal years, in revenue

Ever since the incumbent government, under the late Meles Zenawi, disclosed its five-year Growth & Transformation Plan (GTP) – proclaimed as rather ambitious by many members of the diplomatic community and representatives of international organisations based in Addis Abeba – it has been entertaining shortfalls in its lofty targets. No sector has been as disappointing for the administration – now presided over by Hailemariam Desalegn, who came to power following Meles’s unfortunate passing – however, than the export sector. Throughout the three years, there has been a sizeable gap between the level of achievement and the four billion dollar annual earnings target. As if to further this long standing disappointment, the recently released six month export performance for 2013/14 fiscal year by the Ministry of Trade led by Kebede Chane (pictured) has shown that the downsides have continued to challenge the stability of the economy.  The prime export commodity of the nation – coffee – has seen a year-on-year decline of 38.4pc, whereas spices, cotton and eucalyptus have seen a drop of 7.4pc, 66.2pc and 29.5pc, respectively. Indeed, the export regime of the nation is under distress, to say the least. Positive news exists only in a few export commodities, including pulses and Khat, which saw a rise of 3.7pc and 10.5pc, respectively, over the first half of the fiscal year. If there is anything that the latest performance report shows, however, it is the progressive reorientation of the export regime towards Africa. As a region, Africa has become the largest importer of Ethiopian exports (31pc), followed by Asia (27.1pc) and Europe (25pc). Even more striking is the fact that Somalia, a political basket case in the Horn of Africa, has become the largest importer of Ethiopian exports, with a 14.7pc share. These shifts could have been much more meaningful had the export regime been healthy. But it rather seems to display a paralysis that is in desperate need of surgical treatment, from an administration that will be facing a national election during the next fiscal year. TO SEE THE FULL STORY PLEASE  CLICK HERE.