Livestock smuggling leads to inflated prices in Eastern Ethiopia

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Agricultural products and livestock are the major items smuggled out of Ethiopia via the borders of Sudan, Kenya, Somalia and Djibouti; while manufacturing products and electronics equipment are smuggled into the country. Smuggling out livestock from Ethiopia destined to Middle Eastern countries is becoming a lucrative business.
This illegal business is now becoming a big challenge for cities in eastern part of the country.
Daniel Zeleke, who owns a popular butchery and restaurant in Dire Dawa, 505km east of Addis, explained that the price of cattle is increasing at a fast rate because of the illegal traders. “We don’t have the capacity to buy cattle for the price that the smugglers offer to the pastoralists,” he said. “Even if we can pay the price, it will not be affordable for our customers, so we do not have any option,” he added.
Daniel and other businessmen in the towns of the eastern region and those who come from the central part of the country including Adama and Addis Ababa, buy cattle from rural markets in Eastern Ethiopia, mainly eastern and western Hararge areas, for their butcheries and restaurant businesses or for legal cattle exports.
Kulubi, Dawe and Chelenko are among the rural towns that are major sources of cattle in the eastern region where traders buy cattle for bigger markets in Harar and Dire Dawa.
According to the businessmen, the current price for cattle in rural market is artificially inflated and is very far from real market values, due to the high price offered by illegal traders that collect the cattle to smuggle through the borders. “On average, the price of a mid-size ox is 12,000 birr (USD 600), but in reality, the lowest price you can currently get stands at 20,000 birr (USD 1,000)”; “So, we are forced to pay this amount,” the businessmen added.
According to them, illegal traders pay higher prices because they can sell the cattle to their clients abroad for profits. The business community based in Dire Dawa said that currently pastoralists and farmers are asking from 25,000 to 50,000 birr for an ox, and illegal traders are the major reason behind this inflated price. They claim that they have information that smugglers sell an ox as much as USD 3,000 in the gulf countries.
“It has become difficult for us to compete with contrabandists in the market,” they complained. “We have employees, we pay tax and provide service for a fair price to customers, but we do not have any protection from the government,” they complained.
Illegal traders are not only smuggling out cattle but are also exporting animal feed to gulf countries, according to the business owners around the area.
Currently, some butcheries in Dire Dawa have been forced out of the market or had to divert to other businesses, due to the increased risk involved in the butchery business.
The Ethiopian Revenue and Customs Authority’s (ERCA) mandate includes the control of illegal cross-border trading, import and export of cattle of the country.
The Authority has carried out several initiatives to combat the problem in collaboration with other security bodies in the country. However, the problem persists as a major challenge for traders in the towns of Eastern Ethiopia, which is one of the major frontiers where smuggling is carried out.
“On several occasions, we have explained the problem to relevant government offices in the area and we have discussed the issue with the Dire Dawa City Administration and representatives of other offices including ERCA, but the problem persists,” they said. “The routes smugglers use is well known, but no concerned authority acted to stop the smuggling,” these business people added.
Illegal smugglers use around five exits in the borders of Somalia that stretches 1,626 kilometers, and Djibouti which has a length of 89.16 kilometers, to smuggle cattle.
On different occasions, the government stated that it is working to control illegal smuggling via border areas, mainly through Somalia. But experts say that controlling the borders is a difficult task due to the fact that border areas cover long distances, while traders insist that there are only limited and specific locations that can be used to transport the animals out of the country.
Ethiopia is the foremost country in terms of number of cattle in Africa and is ranked 10th in the world, but livestock and meat exports are almost negligible when compared with its potential.
An unknown number of cattle are exported by illegal traders through the borders each year and farmers and pastoralists living along the frontiers prefer to sell their animals to illegal traders because of the high price they offer. However researches indicate that these illegal trade accounts for 75 percent of overall livestock trade in Ethiopia.
Recent studies indicate that cattle collection in central parts of the country is increasing for illegal trading purposes. While the major and favoured border areas used for illegal cattle smuggling and trading are those with Somalia and Djibouti, other border countries Kenya and Sudan are also destinations for illegal cattle smugglers.
To eliminate the problem, which has increased over time, the government said it has a new strategy that will be implemented in the coming months. In addition, it has taken some measures in the past budget year to boost market links for traders in areas affected by these illegal practices.
The new law is expected to be introduced at the beginning of next month, will increase the controlling mechanism of livestock trading and movement in the country.
The Federal government has also made some changes in the past year with regards to governmental office responsibility such as setting up livestock trading office which is under the Ministry of Trade (MoT). This office will control the trading and transportation of livestock in the country.
The Trade Ministry has also created a new office at a state minister level focusing on livestock resource development, including breeding and veterinary issues.
“The marketing chain is very long. It is not led by the market, but middlemen with five or more marketing chains,” Kelifa Hussien, Director of the Live Animal, Hide and Skin Marketing Directorate told Capital.
To resolve this problem, MoT has been working with ERCA to conceive a marketing-strategy and introduce new regulations to govern the trade.
The new strategy will separate the market into two parts in view of the fact that the price has been artificially inflated by brokers and  transport regulation.
“This will reduce illegal trading in border areas,” Kelifa said.
Experts said illegal trading in the past was limited to border areas, but now animals from other parts of the country are being illegally transported.
The Ethiopian Meat Exporters Association blames abattoirs and meat exporters saying that they are not operating at full capacity.
The government has set a target to earn USD one billion from meat and livestock exports by the end of the GTP. In the past fiscal year, the country earned USD 286 million from livestock exports.