Ethiopia spend 1.4 billion US dollars (around 19 billion birr by the then exchange rate) for importing food and beverages in eleven months (from July 2009 to May 2010).
According to the data newbusinessethiopia.com obtained from Ethiopian Revenue and Customs Authority, the import bill of the country has grown by 68 percent from the previous year 12 month import (July 2008 to June 2009).
Ethiopia’s spending for cereals and other foods for the fiscal year 2008/09 (July 8, 2008 to June 7, 2009) was 830 million USD while the country’s bill for the previous year (July 2007/08) was 362 million USD. Five years ago in fiscal year 2004/05, foreign currency spending of Ethiopia on importing cereals and other foods was at 247 million US dollars.
Compared to the previous fiscal year eleven month (July 2008 to May 2009), the total import bill of the country has grown by 400 million USD as compared to the same period for the fiscal year 2009/10.
The 2009/10 eleven month data of ERCA shows that Ethiopia imported products worth 7.4 billion US dollars in eleven months (July 2009/10), while it exported close to 2 billion US dollars agricultural products, minerals and small amount of manufactured goods such as textiles and leather products in 12 months.
Compared to previous year even though the country’s export has grown by around 500 million US dollars, Ethiopia has not been able to reduce the trade deficit for a long time as its import bill also continues to mount.
Alarmed by the ever-growing trade deficit of the country, the government has now begun taking strong measures, which discourages importers and turn their face towards manufacturing industries to substitute some of the imported. See related story
In order to encourage local manufacturers who produce export items, the government has been providing incentives for the past years, which includes 70 percent credit from its banks and free land and tax exempts. Meanwhile, the result was not as expected.
This is witnessed in the export performance of leather products and textiles, which accomplished 60 percent below government target for the fiscal year, ended July 7, 2010.