Ethiopia’s record export earnings in the 2025/26 fiscal year have masked weaker performance across a wider range of commodities regulated by the Ministry of Trade and Regional Integration (MoTRI), raising concerns over the sustainability and diversification of the country’s export growth.
Ethiopia generated USD 11.2 billion in export earnings during the 2025/26 fiscal year, nearly 20 percent above the government’s target and 35 percent higher than in the preceding year. However, most of the growth was driven by gold and coffee, while several major commodity groups under MoTRI’s oversight struggled to increase foreign-currency earnings.
The contrasting performance has become a major concern among exporters and sector experts, who argue that the country’s macroeconomic reform was expected not only to raise total export earnings, but also to expand the volume, value and diversity of the export basket.
Gold exports surged to about USD 5.6 billion, accounting for roughly half of the country’s total export earnings during the year. Coffee generated USD 3.1 billion, bringing the combined contribution of the two commodities to nearly 80 percent of total export revenue.
However, the performance of the broader commodity-export basket was considerably weaker.
Latest figures obtained by Capital show that exports of oilseeds and pulses—among the main commodity groups regulated by MoTRI—increased in volume during the 2025/26 fiscal year but generated less foreign currency.
Exports of pulses and oilseeds rose by 4.83 percent in volume to 554,837 metric tonnes. Yet total export earnings from the sector declined by 6.16 percent to USD 571.4 million, compared with USD 609 million in the 2024/25 fiscal year.
For the fiscal year, the Ministry had projected USD 743 million in earnings from the two subsectors: USD 394 million from oilseeds and USD 349 million from pulses. Actual performance reached only about three-quarters of the target.
Sector experts said the figures show that higher export volumes did not translate into higher foreign-currency earnings.
The decline was attributed partly to lower international commodity prices, particularly for sesame. Pulse exports performed relatively better, with export volume increasing by 3.84 percent and export earnings rising by 4.44 percent.
The development has reinforced concerns that Ethiopia’s recent export growth remains heavily concentrated in a small number of commodities, rather than reflecting broad-based expansion across the sector.
“One of the key objectives of Ethiopia’s macroeconomic reform was to boost foreign-currency earnings through commodity exports, improve the profitability of export businesses and encourage greater private-sector participation in the sector,” exporters and sector experts said.
However, exporters and other stakeholders following commodities regulated by MoTRI say the reforms have not yet produced significant improvements across the wider export basket.
They acknowledged that international conditions have affected the sector, including regional security challenges, changes in U.S. policy, stagnation in agricultural production and the emergence of new large-scale producers of some of Ethiopia’s key export commodities.
“Particularly, the situation observed over the past couple of years in connection with regional security and new policy from the U.S., in addition to the stagnation of our agricultural production and the emergence of new and big producing countries in our major export commodities, has impacted export growth and earnings,” they said.
However, exporters argue that global challenges alone cannot explain the sector’s weak performance.
They say the government should complement macroeconomic reforms with additional policy instruments aimed at increasing export-commodity production in both volume and quality, while also providing stronger incentives to exporters.
Exporters question engagement
Private-sector actors, including senior exporters, have raised concerns about the relationship between the business community and the National Macroeconomic Committee at the Office of the Prime Minister, chaired by Prime Minister’s Macroeconomic Adviser Girma Biru (Amb.).
Exporters said they are unclear about how the macroeconomic team obtains information on the challenges facing the export sector.
“It is not clear how they get the actual information. Is it that they only get it through papers and figures from relevant ministries?” exporters and sector experts asked.
They recalled that Girma had previously engaged directly with the business community and called on businesses to provide information and updates on trade developments.
“But now he is far from us,” they told Capital.
The exporters said they want greater clarity on the relationship between the macroeconomic team and the business community.
“We want to clarify the relationship between the macroeconomic team and the business community regarding sector development and the new direction set at the highest level of government,” they said.
They also questioned whether the macroeconomic team has firsthand information about the challenges businesses face or relies mainly on reports and data submitted by relevant ministries.
Responding to the concerns, Girma said exporters do not necessarily need to communicate with him or the macroeconomic team directly, arguing that sector-specific concerns should be raised through relevant ministries.
“There is no reason to communicate with me directly. There are relevant ministries, like the Ministry of Agriculture for commodities that it follows, the Ministry of Industry for the industrial sector, MoTRI for other sectors, or other sectors through their institutions, so I can get their concerns through these ministries,” Girma told Capital.
He said exporters should use existing institutional channels to raise concerns, while indicating that he would intervene when an issue specifically required his attention.
“It is enough for exporters to come through the ministers, but if there is an issue that needs me, I will check it,” he said.
Girma also said he would examine complaints where exporters and regulators have unresolved differences.
“If there are satisfactory concerns from exporters or misunderstandings between regulators and traders, we would check and solve the problems,” he said.
Call for incentives
Exporters have called for additional incentives to encourage production and exports, including preferential financing linked to foreign-currency earnings.
They pointed to other countries where exporters benefit from tax rebates and credit incentives based on export performance.
“In other countries, there is a rebate system. They apply it based on earnings, not only for taxes but also through bank credit rebates,” they said.
“For instance, based on the value of hard-currency earnings, bank interest could be reduced to as low as zero percent,” they said. “If such encouraging schemes are introduced, exporters would also be involved in production.”
Exporters argue that such measures could encourage businesses to invest not only in trading but also in production, helping expand supply and improve the competitiveness of Ethiopian export commodities.
Girma, however, said there is currently no new policy direction or change regarding the export sector.
“There is no new policy direction or change regarding the export sector,” he said, adding that “the incentives are the same as they were.”
He nevertheless said the government remains open to hearing concerns from businesses.
“Even though there are no envisaged new policy issues, we would listen if business actors have concerns regarding policy intervention,” Girma said.
Exporters say existing measures, including duty-free schemes for importing processing machinery, are not sufficient to address the structural challenges facing the sector.
They are calling on the government to examine the experience of competing countries and introduce additional mechanisms that can increase production, improve quality and make Ethiopian commodities more competitive in international markets.
They argue that incentives should be linked to actual export performance and foreign-currency generation.
“The same scheme could be applied in Ethiopia. Banks should provide not only credit, but also incentives with different parameters,” exporters said.
They added that the government should consider a range of policy-support measures to achieve the objectives of macroeconomic reform and maintain Ethiopia’s competitiveness in global markets.
Recently, the central bank increased the share of foreign-currency export earnings that commodity exporters may retain to 70 percent, from 50 percent. The retention share is also expected to rise to 100 percent in the coming weeks, in line with the arrangement already applied to service exporters.
Exporters welcomed the move but said additional measures are needed to address production, financing and market-access challenges.
Fragmented responsibility
The weak performance of the broader export basket has also renewed concerns over fragmented institutional responsibility for Ethiopia’s exports.
At present, export responsibilities are divided among several public institutions. MoTRI oversees oilseeds and pulses, while the Ministry of Agriculture manages coffee, tea and flowers. The Ministry of Mines oversees gold and other minerals, the Ministry of Industry handles manufacturing exports, and the Ministry of Water and Energy is responsible for emerging electricity exports.
Experts recently told Capital that the absence of dedicated export oversight is one of the main reasons for the sector’s underperformance, arguing that more than five ministries currently share responsibility for export development.
Ethiopia previously had a dedicated export-promotion institution. The Ethiopian Export Promotion Agency, established under Proclamation No. 132/1998, played a role in expanding and diversifying the country’s export base, including the development of the flower-export industry.
However, export responsibilities became fragmented among different public institutions and ministries in the mid-2000s.
Experts argue that the current arrangement makes it more difficult to develop a unified national strategy covering production, finance, logistics, market access and export promotion.
Diversification challenge
The growing dependence on gold and coffee is raising questions over whether Ethiopia’s export growth is broad enough to withstand changes in international commodity markets.
Although total export earnings reached a record level, the decline in income from oilseeds and pulses demonstrates that higher export volumes do not necessarily result in higher foreign-currency receipts.
Experts say Ethiopia needs to expand and diversify its export basket alongside the increase in total earnings.
The issue is particularly important because the government has set an even higher export target for the current fiscal year.
For the 2026/27 fiscal year, the government has targeted USD 13.4 billion in export earnings, almost 20 percent above the USD 11.2 billion achieved in 2025/26.
On Wednesday, MoTRI met with exporters to evaluate the previous year’s performance and discuss the target for the current fiscal year.
The central question is not only whether Ethiopia can reach the USD 13.4 billion target, but how much of that growth will come from a diversified export basket rather than continued dependence on gold and coffee.
For exporters, the weak performance of several commodities under MoTRI’s oversight highlights the need for stronger production incentives, closer engagement between policymakers and businesses, and a more coordinated national export strategy.
