It is common knowledge that economic experts place emphasis on the need to augment domestic production, exports, foreign direct investment (FDI) and other related aspects to help the country make trade balance certain in the shortest possible time.
With regard to boosting production, attracting production and ensuring trade balance, and other things of a similar kind, pertinent bodies have been working around the clock to make the impossible possible and the unthinkable thinkable.
In the present climate, the federal government has been moving heaven and earth to take the country's economy to the next level of accomplishment by effectuating a wide spectrum of fruitful strategies. It is true that in this day and age, the country has been putting into effect local resources to produce fertilizers domestically with the intention of achieving economic rewards and alleviate foreign exchange matters at the earliest possible time.
Senior Researcher of Economics at Ethiopian Policy Studies Institute, Jemal Mohammed (PhD) recently told the Ethiopian Press Agency (EPA) that the country must boost production, attract FDI and ensure peace to bridge the trade deficit. He also highlighted that investing in manufacturing, agriculture, and mining sectors is vital for improving the balance of trade through increased production.
He warned that a trade deficit worsens financial burdens, foreign currency challenges and inflation. Therefore, he emphasized the need to boost production and FDI to ensure trade balance. Nations like China and Vietnam maintain a positive trade balance by exporting more than they import.
Supporting this rationale, Economist Costantinos Beruhtesfa (PhD) noted that implementing effective policies and creating an enabling environment for manufacturing and agricultural investments helps ensure trade balance and economic stability by increasing productivity, FDI, and export earnings. He emphasized that manufacturing and agricultural production has the potential to be game-changers in realizing Ethiopia's trade balance.
Agricultural researchers emphasize the importance of utilizing local resources to produce fertilizers domestically aiming to achieve economic advantages and mitigate foreign exchange issues.
In an interview he gave recently to the Ethiopian Press Agency, Biru Yitaferu (PhD), a soil researcher at the Ethiopian Institute of Agriculture, said the government is focused on local fertilizer production to save over one billion USD annually spent on imports. Urea and DAP fertilizers are in high demand in Ethiopia, and the country has the necessary inputs to produce them locally.
"Global market fluctuations often impact us negatively, with inflation making us vulnerable. For instance, the war between Russia and Ukraine has caused a fourfold increase in fertilizer prices," he said.
Fertilizer production requires substantial raw materials and high electrical energy. Ethiopia is making strides in generating sufficient energy to support local fertilizer production. In a similar manner, Awoke Mulualem (PhD), the Natural Resources and Climate Program Director at the Ethiopian Agricultural Transformation Institute noted that while fertilizers boost crop production, their overuse can lead to soil acidification and nutrient depletion.
The researcher emphasized that Ethiopia's crop production heavily relies on fertilizers, and the country has faced shortages. "Producing fertilizers locally would play a pivotal role in addressing these challenges and alleviating the foreign exchange shortage," he opined.
CEO of Ethiopia's Industrial Parks Development Corporation (IPDC), Aklilu Tadesse recently told the Ethiopian Press Agency (EPA) that the reformist government has been working to achieve trade balance through boosting industrial production with the active engagement of local and foreign investors.
In the past, Ethiopia had been striving to maximize export while paying less attention to import substitution. Consequently, domestic investors had not played a significant role in the country's economy mainly in the industrial sector that's why close to 94% of the sector run by foreign investors over the past many years, he indicated.
Particularly, the government initiated the domestic investors by providing facilitated areas which has green spaces, asphalt, one stop services, power line, and water and sewerage system.
Chernet Gebremeskel (MD) from the Medical Glove Manufacturing PLC said in the recent past that alluring domestic investors is crucial to boost the economy.
"I have allocated over 160 million Birr to run business and planned to produce international standard quality medical glove in the years to come," he expressed.
Lack of medical glove is a serious challenge in Ethiopia in particular and the African continent in general. Therefore, substituting the product locally plays a significant role in addressing foreign currency glitches.
Approached by The Ethiopian Herald, MoA Food and Nutrition Coordination Office Head Alemtsehay Sergawi said that expanding agriculture commercialization, ensuring food safety and reducing post harvesting losses would contribute to ensure food self-sufficiency in the country.
The nutrition sensitive agro-food system strategy implementation, focusing on widely producing of green leafy vegetables and others would contribute to fill the micro nutrient deficiency. The process needed ensuring the availability of nutritionally enriched food products by affordable price to community.
Food import substitution would be achieved by properly managing agricultural products' losses as well as enhancing quality production and productivity.
For his part, Hawassa University Agriculture Department Lecturer and Researcher Yirsaw Demeke (PhD) recently said that the country has been losing 30 to 40% of agricultural products during post-harvesting period. "If we manage this loss properly, the country would ensure food self-sufficiency shortly," he said.
Ethiopia's policy that was merely focusing on boosting production and productivity, lack of awareness, implementation limitations of policies and strategies and others contributed to result the aforementioned percent of loss.
Focusing on boosting of production and productivity alone is not satisfactory, but it needs reducing loss and improving quality.
Having different policies and strategies alone would not address the sector problems as lack of awareness among the community has been challenging post harvesting process.
Ethiopia can reduce the current post-harvest losses by half through proper awareness creation among communities. To do so, Yirsaw suggested that the country can draw experiences from European nations that minimized the post-harvest losses by less than 2%.
Fairtrade Africa Ethiopia Country Representative, Tadese Negash recently told the Ethiopian Press Agency (EPA) that the Fairtrade is providing technical support, training by creating market linkage across the world for 191 cooperatives to sell products in higher price.
As to him, the organization is following up 191 cooperatives of which 10 unions are certified comprising about 243,000 farmers.
He added that the organization is also working to improve traceability of products, participation of golden cup winners in the world of coffee event thereby connect to the market and expand their operations.
"Every year, after the Ethiopian Coffee Quality Contest held immediately the request comes from buyers then golden cup winners will export, share experience and sell at premium price".
The 4th edition of Ethiopian Coffee Quality Contest 2024 was held in the Fairtrade Africa in partnership with the International Trade Centre and in the competition, Layo Teraga, a local coffee union won the first place and received a certificate. Banko Michata and Oromia Coffee farmers' cooperative unions finished second and third in the competition respectively.
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ITC Ethiopia National Coordinator of the Netherlands Trust Fund, Simachew Mekonnen on his part said that supporting coffee producers enable them to be competitive in international market by creating better market platform through digitalizing of their business.
Project is working with six coffee farmers' cooperative unions and 18 enterprises to strengthen more and designed to value addition, roasting, cubing and brewing technical support to coffee roasters, he said. It will facilitate capacity development as pilot project until 2025.
Economic Experts recently stated that allowing foreign banks to operate in Ethiopia would bring several benefits. Such banks would greatly contribute to tackle foreign exchange crunch, enhance investment and use of technology, ensure financial accessibility and create jobs among others.
Haramaya University Economic Lecturer and Researcher Assistant Professor Habtamu Legesse lately said that the foreign banks' entry in Ethiopia would also lure anchor investors apart from boosting production and creating ample jobs.
Furthermore, the move would increase FDI and support to overcome economic challenges, he said. "Still now, the bank accessibility in rural areas is low, thus, the foreign banks would ensure the overall financial accessibility."
Since the local banks are now providing loans to investors only, the foreign ones would pay heed to those who have not been benefited from such service.
He advised the local banks to extend financial accessibility via mobile technologies rather than opening branches. Such effort requires huge preparations plus the national banks of Ethiopia should consider the adjustment of interest to encourage saving.
