Only ten percent of the national demand for sugar has been fulfilled this year, the Ministry of Trade and Regional Integration (MoTRI), astonishingly reveals.
During the 2022/23 budget year 11 month report tabled to the Trade and Tourism Standing Committee of parliament, MoTRI disclosed that the state owned sugar supplier, Ethiopian Sugar Industry Group (ESIG), supplied only 10 percent of the actual sugar demand of the country.
Mesekerem Baheru, Domestic Trade and Consumer Protection Directorate Head at MoTRI, elaborates that the Group has met 30 percent of the target it expected to provide, “The supply however only managed to cover ten percent of the demand.”
According to the 11 month report, in the budget year, of the first 11 months, 3.3 million quintals of the sweet was expected to be distributed but the actual performance came at a shy one million quintals.
According to Mesekerem, when millers of the Group suspended their production for annual maintenance, there was a plan to import two million quintals but it was not supplied until the end of the 11th month of the budget year.
“Because of several reasons, ESIG produce very limited amount of the sweet due to that most of the regions were getting less than 25 percent of their quota which affected the performance of the sugar sector,” Mesekerem explained.
The state owned estate which is responsible for the supply of sugar from its millers and import, was hit with instability on some of the production hubs and production was under capacity for others. Similarly the import was not effective for almost two years due to challenges stemming from the procurement process.
The group stated that several external and internal challenges hampered its activities making it to not attain its maximum potential.
ESIG, which manages about eight active farms with milling facilities, is projected to fulfill the production of 2.27 million quintal of sugar.
“Owing to various reasons, production this year has been a shadow of what it was last year. Some of them, a few weeks ago have run out of production,” Reta Demeke, Public Relations Head at ESIG told Capital recently.
“Most of the factories started production late because of several challenges including lack of parts and external challenges,” Reta highlighted, adding, “Production is a chain process which primarily is supposed to be done in the preceding seasons.”
Ethiopian sugar millers have a capacity to produce over 4 million quintal per annum, while the actual demand is estimated at about six million quintal. However internal and external challenges pushed the Group to produce at least 2.27 million quintal for the budget year as per the information Capital obtained from the Group early April.
Besides local production, the Group is also importing sugar to fill the gap. For this year, the bid was opened early November in 2022 and Osirius Group was selected to supply 200,000 metric tons of sugar owing to its lowest bid offer compared to other two bidders.
The Group had made several efforts to import the product through the company, while MoTRI on its 11 months report stated that the imported item was yet to be delivered.
Experts in the sector said that the sugar market is currently widely covered by franco valuta as per government’s green light dating two years back. This has been highly eased in the past budget year with private players said to import whatever amount of the commodity they desire with their own foreign currency.
According to MoTRI, in the stated period, 8.3 million quintal of sugar was imported through franco valuta. The amount that was supplied by private players was over 800 percent higher in contrast to source by the state owned enterprise.
Those who closely follow the business told Capital that the failure that occurred at ESIG is covered by the private sector who imported the basic commodity on the franco valuta scheme.
The sector experts critiqued the failure of the Group which led to the inability to secure the sugar for the last two years, which in turn disrupted the market.
Capital’s effort to further obtain information from the Group on the matter was unfruitful.

Policy design to control currency outside banks underlined as of paramount importance to improve liquidity resources in the financial industry.
Experts in the financial industry argue that there is a missing link in the system that has made it hard to combat currency that is circulating outside banks, which is highly affecting the macroeconomic circumstance.
Liquidity challenges have now become a notable site as one of the problems bewildering the financial industry to which some experts opine is an attribute of the loss in control of banks by the regulating body.
On the other hand, some argue the problem is seen on most of the financial industry players, “Nevertheless, it’s a problem that occurs in the absence of a proper strategy and policy which is expected to be emplaced by the government.”
If the liquidity problem is happening in one or two banks it can be stated as a fractional problem of the given financial firm, but the reality is different.
“Now, almost all of the financial institutions are facing this challenge,” one of the major bank leaders expressed.
As the leader informs Capital, the situation indicates that there is systemic problem in the market.
Experts to this end have critiqued government to revitalize its policy.
“Resources that come to banks are not an expression of the market,” financial experts claimed.
They underlined that the report of the National Bank of Ethiopia (NBE) shows that the currency circulating outside banks is increasing from time to time, “This is one of the indicators of how problematic the systemic process is rather than the problem of the banks.”
“This should be corrected immediately with different policy instruments, otherwise the problem will be extravagated,” experts signaled their concern.
According to NBE’s second quarter report of the 2022/23 budget year, the currency outside banking system beat 200 billion birr for the first time in the sector.
The reported indicated that in the second quarter that closed on December 2022, the currency outside banks reached 201 billion birr which rose by 26.6 percent compared with the same period of a year ago.
That amount was however 169.6 billion birr in the first quarter of the budget year which elasticated by over 30 billion birr or 18.6 percent just in three months time.
As of December 2022, the currency outside banks had a share of 8.7 percent of the broad money that increased by 0.4 percent compared with the preceding quarter, while its share for the broad money has decreased compared with the preceding budget year..
In his recent appearance at parliament on Thursday July 6, Prime Minister Abiy Ahmed acknowledged the situation.
“Significant amount of resources is circulating outside the banking system,” the Premier said.
He underscored that as per this coming budget year strategy, his government has taken a direction to tighten monetary policy.
He explained that controlling the money supply and sucking the resource that was pumped to the market will be a policy that his government will take into account in the current budget year that began yesterday, “This move will help to control the market and inflation.”
He added that controlling the resource circulating outside the banking system will be undertaken with the urgency that is required.

The International Air Transport Association (IATA) will publish an annual Track Zero report using IATA’s Net Zero Tracking Methodology to report industry-level progress towards aviation’s commitment to Net Zero carbon emissions by 2050.
The Net Zero Tracking Methodology and related reporting process were developed with industry experts. IATA will aggregate and report annually inputs from IATA member airlines on an industry basis. After thorough validation, aggregate industry data from the previous calendar year will be reported annually in the fourth quarter of each year. The first report with airline-contributed data is planned for publication in Q4 2024. Non-IATA member airlines are also encouraged to contribute data and participate in the reporting.
“Transparency is a critical element of aviation’s decarbonization. We will report our progress annually to ensure standardized, accurate and comprehensive reporting of aviation’s journey to net zero. Industry-level data in the Track Zero report will help airlines, governments, and investors with tools to improve decision-making to accelerate progress,” said Marie Owens Thomsen, IATA’s Senior Vice President Sustainability and Chief Economist.
Individual airlines may use the aggregate data of the Track Zero report to benchmark their own progress towards decarbonization. They may also choose to report their progress on decarbonization to key stakeholders including governments, investors and customers, using IATA’s Net Zero Tracking Methodology.
“Decarbonization is an industry challenge, not a competitive issue. Nonetheless, the report and the methodology behind it can enable benchmarking that could intensify decarbonization efforts by spreading the success of best practices and sparking innovation,” said Owens Thomsen.
Key features of the Net Zero Tracking Methodology include Standardization, Accuracy and Comprehensiveness.
The decision to publish a Track Zero report follows the release by IATA of five roadmaps detailing critical actions for aviation to achieve net zero CO2 by 2050. They address aircraft technology, energy infrastructure, operations, finance, and policy. Together, they show a clear direction and will evolve with the insights of the Track Zero report, practical experience and emerging technologies to help aviation set interim milestones on the way to net zero.