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Ethiopia’s exports continue to fall short of expectations despite revised goals listed in the second Growth and Transformation Plan. The export performance for the 2016/17 budget year was nearly the same compared with the preceding year. Export commodities earned USD 2.91 billion in the last fiscal year.
This is 61.2 percent of the revised target. The government was expecting to earn USD 4.75 billion. This is a reduction of over two billion dollars from the original GTP projection. In the original GTP II matrix that the government published two years ago exports were forecast to earn USD 6.78 billion.
Exports have typically fallen short of expectations in Ethiopia over the years. This time the government blamed the weak performance on factories that were slow to get off the ground. Lack of inputs, management and technical limitations hindered manufacturing. Poor achievement in terms of quality and quantity and lack of market demands reduced performance, according to the report. Contraband is the other challenge that significantly affected export earnings.
According to the revised projection, in the budget year it was expected to earn over three billion USD from agricultural exports, which is the major contributor for the hard currency earnings, while the industrial and mining sectors were expected to bring USD 916 and USD 718 million respectively.
The actual achievement by sector is 71 million, 45 million and 32 million respectively for agriculture, manufacturing and mining.
Coffee, the historical and major hard currency source of the country, has registered marvelous and unexpected achievement compared with the trend that occurred during the preceding year.
Wondimu Flate, public relations department head of the Ministry of Trade (MoT), refused to make available the entire report of the ministry, however the detailed report that Capital obtained indicated that the coffee sector achieved over 93 percent of the revised targets in terms of volume and value of export.
One of the major reasons for the coffee sector’s good performance is the actions and reforms that were taken in the last quarter of the budget year.
Externally coffee has been affected by the fragile and unpredictable trend of the international market. Coffee’s major challenges are influenced by external factors.
In the past few years the coffee sector has been hindered by quality, quantity and illegal trade practices.
To tackle the challenge the government reformed the authority that oversaw the sector a year ago several reforms and policy strategies were developed by the Coffee and Tea Development and Marketing Authority, and the implantation of the new scheme began in March of this year.
According to the export report, in the budget year coffee revenue has grown by over 22 percent compared with the 2015/16 budget year and similarly the export volume has also increased by over 13 percent.
This year coffee earned USD 882 million and the total exported volume was 225,668 metric tons.
The GTP II matrix indicated that the country was supposed to secure USD 1.34 billion from coffee exports in the second year of GTP II.
The other major export commodity for the country is oilseeds, which has not done well in the past few years.
According to the report oilseeds did worse this fiscal year than last. Revenue and the export volume from oilseeds only achieved 58 and 70 percent of the revised projection.
The country earned USD 345.3 million from oilseed exports, which is 26.9 percent worse than the preceding year’s performance. The exported volume has also declined by 25 percent.
According to the revised plan for the year oilseeds were expected to amass close to USD 600 million, while the original document of GTP II predicted that the sector would bring in USD 1.13 billion.
In the GTP II which was written in 2015 the government planned to earn USD 400 million from pulses. However, the revised document reduced the expected revenue to USD 291 million.
The increase in demand for mung beans and chickpeas and the price hike on chickpeas, white and mixed beans contributed to a hike in the sector of pulses.
The report that Capital obtained indicated that pulses sector registered 90 and 96 percent of the revised target in terms of export quantity and value respectively.
The export volume of pulses was 393,282 metric tons which earned USD 280 million. Both the volume and value went up when compared with the 2015/16 budget year.
Last fiscal year, the country earned USD 17 million from spices. This is 51 percent of the goal.
Khat, exports continued to grow dramatically.
The stimulant plant earned USD 273 million for the country, which is 92 percent of the revised targets for the year but very far from the USD 441 million projection of the GTP.
Khat exports surpassed the performance of the 2015/16 budget year, although they did not meet the expected targets.
Livestock has not done as well as hoped. It achieved only 17 percent of the target. The drought and contraband are apparently the major reasons for this. Hopes were that meat exports could become a major business but for now the growth has been slight when compared with the preceding year.
The report indicated that the country earned USD 98 million from meat exports. This is 72 percent of the revised targets. Those targets were reduced by USD 11 million.
In horticulture, flowers, which were expected to become a major export, went down three percent. Horticulture exports earned USD 218 million, mainly from flower exports.
Fruit and vegetables grew but did not meet their targets last fiscal year.
From fruit and vegetables country earned over USD 53.5 million from exporting 184,579 tones of products.
Leather exports earned USD 114 million which is 42 percent of targets. The government expected to earn over a quarter billion USD from leather and leather goods, which is one the oldest export items in the country.
Textile exports registered substantial growth compared with the preceding period but they also did not meet their goals.
The government plans for leather to be a major export item similar to the manufacturing industry however so far this has not happened.
In the 2016/17 budget textiles sector earned USD 89 million, which has increased by 14.3 percent compared with the 2015/16 budget year. However, the performance is only 33 percent of the goal of USD 271 million.
Gold, which was expected to do better this year only achieved 31 percent of the target.
According to the report, the gold registered a weak performance due to the contraband business, which has been a big problem recently. The projection indicated that the country planed to export 18.27 tons of gold and earn USD 676 million, but the actual performance was 5.87 tons and USD 209 million.
The illegal trade via border areas has affected the revenue from the products like livestock, gold and others.
One hundred thirty five countries imported Ethiopian products last fiscal year. Somalia imported 9.4 percent, China (8.4 percent), the USA (7 percent), Saudi Arabia, the Netherlands, Germany and Switzerland, UAE and Djibouti and Japan are the top ten receivers of Ethiopian products respectively. Somalia has retaken the first position from China.
The country exported USD 269 million worth of products to Somalia, while China received USD 240 million worth of export items from Ethiopia. With fast growth USA became the third major export partner for Ethiopia with over USD 200 million.