The Ministry of Trade and Industry (MoTI) announced that it would review the licensing for exports to tackle illegal activity and establish a harmonized export business, in addition to stopping unethical people from abusing the sector.
Misganu Arega (Amb), State Minister of MoTI, told Capital that the ministry will establish criteria for giving export licenses. “We have to review our way of giving licenses to exporters,” he added.
In the past the government claimed that the number of exporters was growing, but export earnings failed to grow significantly. The government says that some unethical people have become exporters with the intention of selling products below invoice to get foreign currency and then turn around and purchase items to import into the country in order to earn huge profits.
For instance, the number of agricultural exporters in the past budget year has grown from 546 to 9,396, but export revenue went down.
“One of the actions we will be reviewing is the licensing process. We will work with those who are mainly engaged in the export business and are not subsidizing another business,” he said.
“The traditional exporters working with established international brands who were employing people are leaving the profession because of these unethical practices so we will work to put a stop to this,” Misganu explained.
Recently MoTI accused exporters of escalating the price of export commodities at the Ethiopian Commodity Exchange (ECX) while others were buying crops outside of ECX, which is illegal.
Even though products like sesame seeds are sold for a high price at ECX people were selling the commodity at a lower price than the trading floor rate which MoTI claimed was under invoiced.
They also cautioned sesame seed and white pea bean exporters that they would prosecute them, while other ethical exporters complained that the government was not taking action. Misganu told Capital that his office is working prudently to take measures.
“We have secured relevant documents from Ministry of Revenue and the National Bank of Ethiopia to identify the contract, export volume and revenue of the exporters in the first three months of the budget year and then during the next three months as well,” Misganu explained.
“Regarding viewing the document we have identified those engaged in illegal activity,” he added.
“We want an ethical exporting regime so this has been affected by some illegal and irregular activities. We are cautious not to affect the country’s hard currency revenue. As a result, we are working carefully to undertake actions that are sustainable,” he explained.
“We never ignore prosecuting illegal actions,” he strongly stated.
“It may take some time since we are highly prudently but since we have been working on it the price has gone down at ECX and the export trend in terms of price is now improving,” he concluded.