- Tanneries among worst affected, contraband salt caravans increasingly common
Regionalized protectionism over the industrial salt market has led members of Parliament and Industry Ministry officials to call for federal intervention to save a leather and tannery industry teetering on disaster.
The supply of industrial salt from the Afar Regional State crucial for tanning hides has seen a dramatic drop in volume over the past six months. Less than two-thirds of the 158,000 quintals of raw salt expected to be supplied to industries such as tanneries in the first half of the financial year was actually delivered, according to a Ministry of Industry report presented to Parliament on Wednesday.
It is in stark contrast to the 36 million quintals of salt estimated to be held in storage in Afar. A significant portion remains unavailable to the market, leading to serious production challenges for salt processing plants and manufacturing industries.
"Industries are unable to access salt, which is a critical input for their operations. Salt should not have been a problem, since it is naturally endowed and Ethiopia has it in abundance. But the Afar Regional State has placed restrictions on the supply. A new directive was introduced that reserves the trade solely for the region," Terekegn Bululta, a state minister of Industry, told Parliament.
Until last year, salt had been mined and supplied by both private businesses and the Ethiopian Industrial Inputs Development Enterprise (EIIDE), a state-owned business, until a new directive restricted this trade to the Afar Mining Corporation.
- Advertisement -The Corporation, however, has been unable to meet demand, and the mismatch has given rise to a growing practice of smuggling salt out of Afar using camels, according to the authorities.
"We are forced to hand over seized contraband salt to the industries, in order to keep the industries operating. But this is no way sustainable," said Tarekegn. "We have conducted discussions with Afar regional administration officials several times but there have been no measures taken to end the exclusive protectionism placed on salt."
The Minister of Industry decried the absurdity of shortages while there are millions of tons of salt sitting idle in warehouses.
"This is a paradox. In one place, there is a surplus and huge [volumes of] salt produced and stored. On the other side, there are very many industries that have stopped production due to a lack of salt. We demand Parliament intervenes. This needs policy intervention. It must be led by market law," Minister Melaku Alebel told MPs.
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Parliamentarians appeared alarmed by the situation.
"Are regional states not members of the federation?" asked Amarech Bekalo (PhD), chair of the standing committee for Industry and Mining Affairs. "Where are we heading? There is salt mined and accumulated in one region, but manufacturing industries in the country are stopping production due to a lack of salt. Hides and skins are becoming waste across the country. The federal government must ensure the constitution is being upheld. The regional state where there is salt cannot stand alone. Any resource found in one regional state belongs to all and must be shared."
MPs observed the hold on supply is resulting in a hike in salt prices.
Although Parliamentarians and officials agreed on the need to repeal the 'salt input supply' directive and end the monopoly over salt, they did not specify which government organ has the mandate to intervene and order the Afar regional administration to open the market.
