Wednesday, October 28, 2026

Misuse of import privileges hurting local manufacturers

In the Ethiopian year 2007 a law was passed to make it easier to import food and traditional clothing around the border regions. It allowed people living in those areas to import the items tax free and without foreign currency. The rational is that infrastructure issues make it more difficult to obtain these items from the capital city. This type of trading should involve small transactions among people living along the border. However, at the moment, single transactions of over 200,000 cartons are coming across the border. The imports are massive and the products are coming all the way to the center of the country and competing with local manufacturers who pay the requried taxes.
This is seriously affecting and discouraging local manufacturers as they pay tax unlike the people who import these products under this directive. This gives them an unfair advantage and is not what the sprit of the law intended.
Article 6.2 of the directive clearly indicates that people who misuse this rule to import products to the center of the country will be prosecuted. This is not only driving local manufacturers out of business but also discouraging all their efforts toward import substitution, which would save foreign currency for the country.
Among the categories that are tremendously affected by this directive is the pasta manufacturing industry. Ethiopia’s policy clearly supports the agro-processing industry. However, this directive is going to be a major bottleneck in the development of the sector unless something is done immediately to curb this problem.

Hot this week

Production up, but the ‘cost’ variable weighs heavily

Production is up in 2021 for the Italian agricultural...

Luminos Fund’s catch-up education programs in Ethiopia recognized

The Luminos Fund has been named a top 10...

Well-planned cities essential for a resilient future in Africa concludes the World Urban Forum

The World Urban Forum (WUF) concluded today with a...

Private sector deemed key to unlocking AfCFTA potential

The private sector’s role is vital to fully unlock...

Nyala insurance unveils the “NISCO Reimagined” strategy as it celebrates its 30th anniversary

​Nyala Insurance Company S.C. has reported total assets exceeding...

Ethiopia’s OTC market targets 8 securities outside main listing requirements

Ethiopia’s securities market is preparing to accommodate eight securities...

BitFuFu evaluates terminating $4.1M Ethiopian bitcoin mining deal amid power dispute

Nasdaq-listed Bitcoin mining operator BitFuFu Inc. is reassessing its...

Ethiopia targets 4.4 million off-grid connections under new electrification plan

Ethiopia has officially launched its National Electrification Program 3.0...

Weighted average dollar rate falls to 159.70 birr in NBE latest auction

Ethiopia’s weighted average exchange rate for successful bids in...

After three decades, UN mission in Somalia prepares to close operations

The United Nations Transitional Assistance Mission in Somalia (UNTMIS)...

No African Country Meets Malabo Agricultural Development Benchmark, FAO

No African country met the overall agricultural development benchmark...
spot_img

Related Articles

Popular Categories

spot_imgspot_img