By Muluken Yewondwossen
The decision of the government to facilitate the local sales of export-quality coffee in foreign currency has been positively received by coffee roasters and exporters. The Ethiopian Coffee and Tea Authority (ECTA) made history recently with a directive that closely monitors the coffee sector under government supervision. According to the new guidelines, certain locations will be designated for the local sale of coffee in foreign currency.
Coffee has been a significant export commodity for Ethiopia since the late 19th and early 20th centuries. Currently, it is the largest source of hard currency and a vital source of income for a quarter of Ethiopians. However, Ethiopian buyers have faced stringent export standards for coffee, and until about five years ago, adding value to the coffee beans was uncommon. In recent years, the government has implemented legislation and policies to encourage Ethiopian businesses to engage in value addition and export.
While value addition has been promoted, local sales of coffee products were not permitted until recently. This changed when Wild Coffee Ethiopia, a renowned premium coffee roaster, obtained a special license to sell its products in foreign currency at its shop in Addis Ababa.
“I advocated for a mechanism to sell coffee in foreign currency locally to relevant government officials,” says Gezahegn Mamo, CEO of Wild Coffee Ethiopia. “I would like to express gratitude to those who understand the concept and allow us to conduct this business for the benefit of the country and my company.” “Until recently, I was the only roaster selling coffee in foreign currency, but with the ECTA’s directive, those with the capacity to conduct this business can now legally sell the product, which is great news,” he told Capital.
Addis Belay, CEO and founder of Arada Coffee, expressed appreciation for ECTA’s decision, saying, “Our brand has gained significant acceptance in the global market, and we currently sell our beans at a good rate in duty-free shops at Bole International Airport.” He described the previous approach as paradoxical because, although they had good global penetration, Ethiopian policy prevented them from selling the beans domestically.
“The policy forces foreign workers in Ethiopia to obtain Ethiopian coffee from outside, even though Ethiopia exports coffee that is widely regarded as being of extremely high quality worldwide,” Addis stated.
According to Addis and Gezahegn, there is a substantial foreign population in Ethiopia, including expatriates from international organizations, embassies, and NGOs who are paid in foreign currency. However, they are not allowed to use foreign currency to purchase food in Ethiopia, forcing them to import it from abroad. This directly affects the country’s hard currency earnings.
“Nevertheless, such initiatives enable the nation to earn more hard currency without incurring additional costs for shipments and other expenses,” they claimed. “Addis Ababa is a major conference hub in the continent, a destination for travelers and tourists that can tap into the lucrative opportunities of this business,” Addis added, referring not only to foreign residents but also to visitors who pay in foreign currency.
According to these roasters, the new decision will contribute to elevating Ethiopian coffee’s recognition on a global scale. Gezahegn mentioned that the response has been quite positive since his company, Wild Coffee, was allowed to sell value-added coffee in foreign currencies two years ago. “I am thrilled to be a trailblazer and demonstrate how we can change the previous trajectory,” he remarked.
Gezahegn expressed some reservations about the new regulation, particularly regarding the requirement stated in article 4.6 of the directive, which mandates sellers to report transactions to the authority on a weekly basis. He believes that a reporting frequency of one to three months would be more practical. According to Article 5 of the directive, tourist hubs such as hotels, motels, lodges, pensions, restaurants, and cafes are permitted to offer export-grade value-added coffee. Additionally, parks, airports, and international conference centers have been included as hubs to market the beans.
Ethiopia, as the birthplace of coffee, boasts a diverse selection of coffee varieties unmatched by any other producer worldwide.
