According to the analysis of CEHPEUS research and analytics on Ethiopian trade performance, the research firm forecasts that this year the performance of Ethiopia’s export will show a 14 percent growth and is set to generate 3.4billion dollars.
The expectation of large volumes for gold, coffee shipment and a strong performance from the horticulture sector is said to provide this significant role on growth.
CEHPEUS research stated that in the last fiscal year Ethiopia had changed its market with by driving its export mix to the EU market rather than the USA and China.
According to the analysis three European nations, namely; The Netherlands, Switzerland and Germany increased their purchase of Ethiopian goods by over 300 million dollars from the entire export of the last fiscal year 2019/20. Unfortunately, USA and China, two of the biggest Ethiopian buyers, reduced their purchasing order by 25 percent each.
“The shift in Ethiopia’s top export markets reflects a gradually changing product mix, especially in the sharp rise of gold exports as well as in flower exports,” stated CEHPEUS research. The uncertain performance of manufactured goods indicates the fall in exports to the US and China which are the primary buyers.
The policy reform at the central bank has helped the rise of gold exports, while the well-established cargo services of Ethiopian airlines aids in the timely delivery of flowers. Non-traditional exports, like electricity has also risen in its export by generating 66 million dollars. Electronics exports have also generated 38 million dollars.
According to the analysis, export has generated only 15 percent to the total foreign currency flow in Ethiopia in the last fiscal year 2019/20 which was 20 billion dollars. Other significant sources include; services totaling to 4.7 billion dollars, remittances 4.7 billion dollars, grants 1.5 billion dollars, loans 2.7billion dollars and FDI 2.4billion dollars.
However the Government forecasts 3.9billion dollars in exports for the coming fiscal year which is a growth of more than 25 percent.
The analysis further forecasts 7 percent growth for import substitutions since the chunk of governments’ budget is in infrastructure. However, government expectation in import substitution this coming year is at 4.5 percent.
According to the research even if there is a shift in export destination China still remains the dominant origin of Ethiopia’s import. Around a quarter of Ethiopia’s total imports, are sourced from China, and the share is even larger if we are looking at just non-oil imports alone. Other leading sources of imports are India, Kuwait, US.
Imports of Capital Goods and Consumer Goods are nearly the same. Based on an end-use classification of imports, imports of capital goods and consumer goods were each nearly 4 billion birr last year and together accounted for 60 percent of total imports. Though both have shrunk relatively to the GDP, capital goods imports have shown a relatively sharper fall over the years from 11 percent of GDP five years ago (when overall investment was 39 percent of GDP) to just 4 percent of GDP last year (when the ratio was close to 34 percent of GDP).
Imports to GDP fell to just 12.8 percent of GDP last year, down from around 30 percent of GDP a decade ago. This decline relative to GDP continues to support country’s external adjustment, most notably by helping reduce the current account deficit, at 4 percent of GDP in 2019-20, the lowest level in eight years.
Ethiopia’s export will show a 14 percent growth this year: Report
The steadfast generosity of Abay Bank
Abay bank which is celebrating its ten year anniversary has given more than 20 million birr to support different national activities in the country.
Abay, which is named after the nation’s primary river has also bought a five million Birr worth of bonds for the construction of the Grand Ethiopian Renaissance Dam (GERD).
According to the bank, Abay has donated 2 million birr each to the biggest Ethiopian Cardiac Center for Children and to Amhara’s regional State Heritage preservation and Tourism Development Fund.
In the aid to support the response of the national disaster and risk management agency, the bank also made a one million contribution.
Following the Prime Minister call to join the “Dine for Nation” event, Abay has allocate 10 million birr to buy tickets to attend the gala dinner that will be hosted to raise funds for the rehabilitation of three tourist destination sites Located at Gorogora in Amhara Regional State, Wonchi in Oromia Regional State and Koisha in Southern Nations, Nationalities & People’s Regional State by the initiation of the Prime Minister Abiy Ahmed.
On Thursday October 1, 2020 the bank has handed over the cheque for the representatives of the prestigious event.
At the onset of the bank’s come up, in July 2010 it started its operations with 174.5 million birr in capital, 128 million birr in paid up capital with 823 shareholders.
In the decade of Abay banks existence it has amassed over one million subscribers, 17.1 billion birr in deposits, 3.4 billion birr in capital and 22 billion birr in assets. Abay also provides 12 different service loans to it million plus customers. It recently introduced a new electro- payment solution called “The Uni-Cash system” integrated with the latest version of core banking.
According to Abay Bank the system will enable customers to make all kinds of payments including school fees with digital technologies.
Ministry launches fundraising committee to replace destroyed property
The government has launched a National Fundraising Committee to support those who lost their properties due to the recent violence in Oromia region following the assassination of singer Hachalu Hundesa, on the 1st of July 2020.
In collaboration with the different stakeholders the Ministry of Labor and Social Affairs is going to be the head of the fund raising that aims to re-build properties.
On Monday, September 28, 2020 the Ministry officially launched a committee formed by different stakeholders, including the Ministry itself, employers’ confederation, employees and Ethiopian confederation of Trade Unions. The committee comprising of 31 members from different stakeholders includes Ergoge Tesfaye, Minister of Labor and social Affairs, Adanech Abebe Deputy Mayor of Addis Ababa city and Laek Ayalew, Minister of Revenue.
As disclosed by the Ministry the committee is expected to collect more than 500 million birr in funds from different sectors
The Ministry emphasizes that these funds will be instrumental to both the property owners (employers) and employees because it will assist in the unburdening process. Furthermore, it will help employees to return to their respective workplaces when the properties become functional again.
Following the assassination of the singer in Addis Ababa, the huge protests by his avid fans led to a catastrophic blazing of property. Law enforcement in the region confirmed that thousands of houses inclusive of health centers, schools, hotels and restaurants were raised to the ground. According to government, property worth 4.7 billion birr has been damaged thus far.
Agency tables 11 public enterprises for privatization
The Public Enterprises Holding Administration Agency (PEHAA) disclosed that 11 public enterprises will be tabled for privatization in the current budget year.
The agency that concluded the 2019/20 budget year without selling any public enterprise to the private sector has stated that in the 2020/21 budget year, 11 enterprises will be tabled for privatization.
Wondafrash Assefa, Public Relation Head at PEHAA, told Capital the companies that will be tabled for privatization are yet to be disclosed. However, he confirmed that the enterprises could be mega enterprises.
“The privatization process for mega enterprises is directed by the Ministry of Finance, which is the higher body of PEHAA,” he explained.
The agency has set11 enterprises up for privatization but the final decision comes from the Ministry.
In the past budget year, PEHAA had floated Abaya farms which is located in Omo Valley around Arba Minch of SNNP. However, the process did not yield positive result. The farm is well known for its banana plantation that covers an area of 1,195 hectares,
A few years back the farm had been managed by Amibara Agricultural Development PLC, which bought Middle Awash Agricultural Development Enterprise, on lease.
The farm has also been administered by Ethiopian Agriculture Works Corporation, which is a state owned enterprise.
The government has also targeted to partly privatize Ethio Telecom, of which 55 percent share will be held by the state, 40 percent by foreign investors and the remainder by Ethiopians.
The sugar sector is also the other mega enterprise that may be included on this years’ privatization process.
In the concluded budget year, 21 public enterprises have generated over 300 billion birr in revenue with gross profits of 55.5 billion birr before tax.
In the current budget year, the enterprises are expected to generate over 376 billion birr in revenue and close to 74 billion birr in profit before tax.
Ethiopian Airlines has led in the revenue generation front by generating 122 billion birr, followed by Ethio Telecom with 47.7 billion birr in total revenue.
Capital’s attempt to get further information about the enterprises that will be floated in the current budget year from Ministry of Finance was unfruitful.
