The Ethiopian Coffee and Tea Authority (ECTA) has issued a new directive significantly increasing the minimum capital requirements for coffee exporters. The move aims to professionalize the sector and curb illegal business practices by raising the starting capital for private exporters by 15 times and for trade associations by over 13 times.

Under Directive 1106/2025, private exporters must now have a starting capital of 15 million birr, up from 1 million birr. Trade associations and companies like joint stock and limited liability companies face an increase from 1.5 million birr to 20 million birr. ECTA explained that the previous regulations were insufficient to support, monitor, and control exporters, particularly concerning the misuse of certificates of competence.

Additionally, all exporters—except farmer exporters—are required to have a coffee laboratory certified by ECTA for basic quality testing. They must also appoint a professional taster with at least a diploma and a renewed proficiency certificate, who can serve only one coffee dispatcher.

Semachew Ababu, a veteran coffee exporter, welcomed the directive, saying it will “refine the market” by limiting participation to well-financed companies, ultimately improving product quality and international standards.

However, the regulation has sparked concerns among smaller businesses. Entrepreneur Sosena Desalegin expressed frustration over the sudden increase, saying, “It’s impossible to raise that much money overnight for a new business. This regulation strengthens the market and destroys new ideas and competition.”

An independent expert acknowledged the intent to curb illegal activities and enhance professionalism but warned that the steep capital hike might stifle innovation and competition. “It may limit the sector to a few large players, which is not healthy for long-term growth and diversification,” the expert said.

The new guidelines came into effect this week and are expected to significantly impact Ethiopia’s coffee export market.