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Ethiopia: Nine Months Export Plan Falls Short of Target
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Addis Fortune (Addis Ababa)
28 April 2008
Posted to the web 28 April 2008
Wudineh Zenebe
The federal government has once again failed to attain its mark in export in its nine-month performance this budget year. Against its initial target of securing 1.28 Billion Br in proceeds from exports in the first nine months, the government only made one billion Br.
In the 2007/2008 budget year, the Ministry of Trade and Industry (MoTI) has targeted fetching 1.7 Billion Br from commodities export, an amount slightly higher than its previous budget year's goal of 1.5 Billion Br.
The country needs to export over half a billion worth of commodities in order to hit the spot, which is 70pc of what it has so far achieved in the budget year.
This does not seem realistic for close observers of the export market.
"Exporting commodities worth 700 million Br in three months is going to be a daunting task for the country," an official at the MoTI told Fortune.
The failure is attributed to an under performance of industrial products while agricultural exports have registered a better record; 337 million dollar revenue was secured from only coffee followed by other agricultural commodities -cereals, grain, oil seeds and live animals.
Processed commodities, which have restrained the overall performance, include leather and leather products, and textile. From the 100 million mark initially set by the MoTI from the export of leather and leather products, only 74.4 million dollar has been achieved in nine months.
Textile was also a disappointment. The country earned merely a third of its 29.5 million Br target from its export in the first nine months of the budget year.
According to a source at the Ministry, due to the slow progress of the textile factories that were projected to begin operation this year. Leather and leather products fell short of target because of an export tax slammed on these items in January this year to discourage the export of semi-processed leather.
Ethiopia earned 1.2 billion Br from exports in the 2006/2007 budget year. Though this is 300 million Br lower than the target, it is 17.5pc higher than the previous year's earning.
Export items sent abroad in the budget year were divided into 29 categories. The main revenue generating commodities next to coffee were grains, oil seeds, spices and Khat.
Though coffee is the number one foreign currency generator, it only fetched 424.1 million dollars, lower than the 488 million dollars goal the government set. Grains, oil seeds and spices jointly were projected to fetch 343.7 million dollars but export earnings from these commodities stood at 267.5 million dollars. The same goes for Khat, which managed to fetch 92.8 million dollars while the expectation from the stimulant was 110 million dollars.
The federal government wants its export revenues to grow by five per cent annually.
Despite the current shortfall, an official at the MoTI argues that the government is exerting efforts to change the course after two years. The MoTI has set out to revolutionize the export of textile, leather, meat as well as commodities from the construction industry and agro-processing sector.
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According to its five year strategic plan, the government expects to earn half a billion Br from the export of textile in 2010. However, when only two years are left to reach the target year, Ethiopia is not even earning 20 million dollars a year. From export of leather and leather products, Ethioipa expects 221 million Br annual proceeds in 2010.
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