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Ethiopia: Country Falls Short of Mid-Year Export Target
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Addis Fortune (Addis Ababa)
28 January 2008
Posted to the web 28 January 2008
Wudineh Zenebe
Ethiopia netted 552.7 million dollars in export revenues in the first six months of the 2007/08 fiscal year, missing its target by 11.2pc. The Ministry of Trade and Industry (MoTI) had targeted to generate 622.3 million dollars.
The performance is merely a third of what the country envisaged to collect from exports this fiscal year (1.7 billion dollars).
However, both the first quarter and mid-year performances have fallen short of the targets. Setting a 296.1 million dollar revenue target for the first quarter of the fiscal year, it only secured 270.8 million dollars.
To meet the target within the remaining time, the country has to surpass targets and earn over a billion additional dollars.
The federal government would like to see the export sector grow from its 1.2 billion dollars the previous year so that the imbalance between the value of imports and exports gets narrower as the currency continues to tumble.
The five-year strategic plan for Accelerated and Sustained Development to End Poverty (PASDEP) focuses government support on those sectors that add value to agricultural exports like textiles, leather and leather products, and agro-processing.
Leather and leather products, a sector the government has placed high priority on holding a trade fair and granting investment support, fetched 50.4 million dollars in the past six months, meeting 90pc of its target. This represents a boost from the first quarter when the country grossed 20.8 million dollars, just 82.7pc of its target.
According to sources in the sector, exports increased because exporters sent huge volumes of pickled and wet blue in December.
MoTI had instructed exporters two years ago to increase value-added goods' exports, jumping from semi-processed leather to finished leather products. To discourage them from exporting semi-processed leather, the country has imposed a higher tax rate on exports as of January 2008. According to an expert, the exporters sent huge volumes of semi-processed leather in December to avoid the extra cost they would incur from the increase in taxation.
From the textile sector, only 7.5 million dollars was generated though the target was 16.5 million dollars. According to a textile expert this is because most the new textile factories have not gone operational and those under operation focus on the local market.
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The agro-processing sector, on the other hand remarkably outshined the 8.3 million dollar target by over 200pc, earning 16.7 million dollars.
Flowers were also a disappointment. The sector only met 72.3pc of its target fetching 43.8 million dollars. Khat brought 55.3 million Br to the country, meeting 93.3pc of its target.
Chairman of the National Export Commodity Committee, Prime Minister Meles Zenawi, who follows reports of the sector's performance every month is expected to convene with stakeholders concerning the six months performance in the coming two weeks, sources disclosed to Fortune.
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