Fifty eight exporters to face the long arm of the law

By Muluken Yewondwossen
The Ethiopian Coffee and Tea Authority (ECTA) has demanded stringent measures be taken against 58 exporters for failing to export coffee and generation of foreign currency thereof, despite receiving a great deal of financial backing. In response, the National Bank of Ethiopia (NBE) has now ordered all banks to provide a loan and advance audit report of the exporters.
The directive, issued by Frezer Ayalew, Director of the Bank Supervision Directorate at NBE, states that the exporters’ qualification has been suspended, and that the NBE has been requested to take necessary actions against them for misusing loans and advances intended for coffee exports.
The NBE has instructed banks to conduct a detailed loan review assessment of the exporters and to submit the audit report by September 4 at the latest. As indicated, the assessment should include information such as the amount of loans and advances granted, collateral type and amount, loan utilization for the intended purpose, foreign currency generated by outstanding balances, and the loan status of the exporters as of July 31, 2023.
Although the list of affected businesses has not been disclosed, it is reported that prominent companies are among the exporters facing scrutiny. The ECTA letter, issued on August 16 and sent to the NBE, highlights the government’s special support to the sector in accessing finance. While 144 coffee exporters accessed the loans and advances under the special facility, only 37 of them utilized the scheme for their coffee export business. The remaining 58 exporters failed to export coffee, resulting in a lack of generated foreign currency and negative impact on the sector.
As a consequence, the ECTA has suspended the certificates of the exporters who misused the loans. The authority has requested relevant bodies to take similar measures against the listed exporters. In the 2022/23 fiscal year, Ethiopia earned more than USD 1.3 billion from coffee exports, falling short of the planned USD 1.8 billion target.
Coffee is a vital source of hard currency for the country and supports the livelihoods of over 30 million people, contributing significantly to the economy.