Ethiopia: Duty Free Import Regulation On Basic Food Items Necessary and Timely

Last week the Ministry of trade and industry issued a timely regulation which allowed companies to import basic food items like rice, flour and other food items on duty free. Over the last two years, particularly in the advent of COVID-19 pandemic in Ethiopia, the government has issued far reaching austerity measures that helped to make the national economy to stay on track.

Basic food items have been allowed to enter the country duty-free to reduce the impact of the CVD-19 epidemic on society.

Ministry of Trade and Industry Communication Affairs Director, Mr Wondimu Flate, said food, sugar, bread, rice and baby milk are allowed to be imported duty-free.

According to the director, 5 litres of sesame oil, which was sold for 480 birr three months ago, is now being sold for 280-320 birr due to the lifting of the tax on food items.

Finally, only 10 licensed Diaspora account holders have been employed so far and preparations are underway to ensure that the palm oil, which is currently being distributed by the government, is being stored and imported, said Mr Wondimu.

The Minister could have issued the regulation much earlier over the year but still it is a commendable step in the right direction.

The establishment of food banks at community level, offering grace period and financial support for companies hit by the effects of COVID-19, introduction of irrigated lowland wheat farms and other measures that helped to make food available on the market.

Import of essential food items with no levying of taxation cannot be recommended as a permanent measure but is very useful for short term or transitory period until these products are produced within the country.

The current regulation on import of food items immensely contributes to the stabilization of food prices and would promote delivery of basic food items right at the grass root level. It would also help to check the galloping inflation that is mostly triggered by the skyrocketing of food items on the local market.

Along with processing the import of food items, it is very important to focus on quality and dates of production of the food items to check on expiry dates to be clearly indicated on each item and batch.

The government is now conducting huge relief and rehabilitation programs in different parts of the country primarily in Tigray Region and Metekel. The availability of basic food items through duty free imports will also help government efforts to provide relief food to population displaced in Tigray and the rest of Ethiopia.

The implementation of the regulation presupposes the selection of qualified importers from among those who apply for the program. This would mean that importers with good history of importing food items need to be carefully selected. It is very important to take measures that will help to promote transparency in the whole system.

After duty free imported food items arrive in the country, distributors could play both positive and negative roles depending upon their capacity and commitment to public interests. If imported food items are hoarded in warehouses that are not properly registered, the commodities imported on duty free could end up in the hands of illicit traders and contrabandists as well as unregistered profiteers.

Pervious practices on duty free imported food items or subsidized food stuff show that prices of food items are manipulated by individuals and companies that do not care about the purpose for which foods are imported duty free.

On the other hand, strict quality control and detained information on items imported need to be mandatory to avoid import of adulterated or sub-standard food commodities. This is very important because it involves critical health care requirements and national standards. The Ministry of Trade and Industry, I think has issued the regulation to fill gaps created in the local market on primary food items.

In the future, with the development of agro industrial parks a massive import substitution program must be launched by producing all the basic food items within the country. This creates sustainable supply of food items and will also be instrumental in beefing up the national relief food reserve. Such import substitution of food commodities need to be conducted not only by different economic sectors under public ownership but need to involve the private sector as well as local and international investors.

Valued added agro-industrial products like food items can effectively replace imported food items with cheaper prices as well as quality commodities for public consumption.

Production of edible oil by three manufacturing companies is on a promising state for moving towards import substitution for oil. Similarly, bumper harvest is expected from irrigated lowland wheat farms across the country.

The whole purpose of duty free importation of food is to meet the needs of the public at all levels. Any sabotage in the supply chain of imported foods can frustrate the entire objective of the austerity measure and therefore needs closer monitoring and follow up not only by the Ministry of trade and Industry but also by all stakeholders including the consumer societies.

The negative experience that the government has encountered in the production and distribution of cement and the resulting false price tags on this product should not be repeated in the distribution of food products like oil. There are thousands of tons of oil either imported or produced in the country. Despite such efforts prices for edible oil has continued to increase unabated. This is a dangerous trend not only on consumers but the entire economy.

In a couple of months, the main rainy season will set in and some level of food gap could be created. This would mean that necessary preparations should be made within fixed period of time for shortlisting potential importers with less need for bureaucratic red tape. Besides warehouses and logistics facilities are to be put in place before the food items are imported.

Duty free importation of basic food items will enable the country to effectively absorb food insecurity shockwaves that could introduce hyperinflation in the national economy.

It is also useful to involve consumer cooperatives and produces cooperatives across the country into the entire system to exploit their vast experience with the public in distributing basic consumer items including essential food products.

On the other hand, the public should also have the chance to comment on the mode of distribution of the commodities and allowed to provide constructive ideas on how distribution of the food items is to be conducted to ascertain equity and transparency.

Editor's Note: The views entertained in this article do not necessarily reflect the stance of The Ethiopian Herald

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