The Ethiopian government plans to create a dedicated authority to oversee commodity exports in a more streamlined manner, with implementation expected after the formation of a new government in the upcoming budget year.
Sources close to the situation have confirmed that a proposal for this authority has been submitted to the Prime Minister’s Office, and preparations are underway to advance this initiative at the start of the next Ethiopian New Year.
This initiative comes in response to ongoing challenges in the export sector. Despite government policies prioritizing export earnings, actual revenues have remained limited when compared to regional peers and in relation to the sector’s contribution to gross domestic product (GDP).
One of the main objectives of the 2024 economic reforms was to enhance exports, but officials in the sector admit that the results have largely fallen short of expectations.
However, there have been notable gains in specific areas; for example, mining exports, particularly gold, have significantly returned to legal channels.
The coffee sector, historically Ethiopia’s leading source of hard currency, has also experienced substantial growth in recent years, bolstered by global market trends and government initiatives.
One source told Capital, “The contribution of macroeconomic reform may not be directly linked to the success achieved in coffee export earnings. Despite the reform’s target of further achievements in the export sector, its actual contribution has been very limited.”
Currently, gold and coffee dominate total export revenues. In the first seven months of the current budget year alone, gold exports generated over $2.1 billion—148 percent of the target. Additionally, emerging electricity exports are being identified as a significant future source of foreign currency.
Experts highlight the lack of dedicated oversight as a primary reason for the sector’s underperformance, noting that more than five ministries currently share responsibility for export oversight, even though most were established to manage different sectors.
“Exports are highly dynamic and require effective leadership with qualified staff, as they operate in a competitive international arena,” experts explained.
A source indicated that while there is interest in creating an export entity under the Ministry of Trade and Regional Integration, positioning it as a mere branch would be “meaningless.”
“The decision to consolidate the export sector under a single command is correct, but it must report directly to the Prime Minister’s Office, as was done in the past. The ministries should serve as supportive entities,” experts added.
Ethiopia previously had a successful export promotion agency. Established under Proclamation No. 132 in 1998, the Ethiopian Export Promotion Agency (EEPA) was led for several years by prominent economist and senior official Fantaye Biftu. The agency achieved significant results, including the diversification of exports to include new commodities like flowers.
However, in the mid-2000s, the export function became fragmented across various public bodies and ministries. Currently, the responsibilities are divided: the Ministry of Trade and Regional Integration oversees oilseeds and pulses; the Ministry of Agriculture manages coffee and tea; the Ministry of Mines handles gold and minerals; the Ministry of Industry covers manufacturing; and the Ministry of Water and Energy is responsible for electricity exports.
Experts argue that an independent body is essential for leading the sector professionally. Key functions of this body would include analyzing export products, understanding international markets, benchmarking against competitors, and assessing Ethiopia’s potential market share.
“Those with expertise in the sector—not newcomers learning on the job—should lead the upcoming regulatory body,” experts advised. They noted that when EEPA was led by Fantaye, his team was highly qualified, and after the agency was dissolved, most staff were reassigned as trade attachés to diplomatic missions.
In 2005 the agency was dissolved and the Export Promotion Department (EPD) was established under the ministry of Trade and Industry to discharge the duties and responsibilities formerly handled by the agency.
Ethiopia recorded $8.3 billion in export earnings for the previous fiscal year, primarily driven by coffee ($2.6 billion) and gold ($3.4 billion). For the current fiscal year ending July 7, the government has set an ambitious national target of $9.4 billion, with officials recently suggesting that earnings could exceed $10 billion.
The former EEPA played crucial roles in coordinating efficient working arrangements among producers, exporters, and service providers; enhancing competitiveness in overseas markets; and connecting Ethiopian exporters with foreign importers through promotional campaigns and market studies.
A previous export strategy prepared by the Swiss-based consultancy Dalberg also recommended increased commitment and diversification in the export sector.
The proposed new body is expected to be formally established following the national election scheduled for June.
