Ethiopia Forms High-Level Trade Liberalization Committee

The Ethiopian government has established an inter-ministerial committee to spearhead the liberalization of its trade policies. In announcing its formation, Ethiopian Investment Commission (EIC) Commissioner Hana Arayaselassie reveals that the Trade Liberalization Committee will include representatives from key agencies.

Members are drawn from the EIC, the Ministry of Trade & Regional Integration, Ministry of Industry, Ministry of Revenues, Ethiopian Customs Commission, Ministry of Agriculture and the National Bank of Ethiopia. Addressing a press briefing, EIC Commissioner Hana Arayaselassie says the previous approach of heavily protecting certain industries had not yielded the desired results of capital accumulation and sectoral transformation. Exports have remained stuck at around 3.5 billion dollars annually despite protection, while certain industries still face challenges in accessing markets.

A new directive approved last week by the Ethiopian Investment Board will now allow foreign investment in major export crops like coffee, oilseeds, pulses and hides & skins. It also permits foreign companies to import all goods except fertilizer and petroleum. Wholesale and retail trade is being opened to foreign ownership as well under the directive.

Investors will need to obtain permits as required by the new regulations, which take effect upon publication on the websites of the Ministry of Justice and EIC. For coffee exports, a minimum 10 million dollars annual procurement history or commitment to export 10 million dollars annually for the past three years is mandated. Oilseeds requires five million dollars annually.

Even smaller crops face thresholds of one million dollars for pulses and USD 500,000 for hides. Livestock is the only sector without an experience criterion. Companies new to Ethiopia face higher barriers of 12.5 million dollars for coffee and 7.5 million dollars for oilseeds.
Wholesale traders must commit to modern infrastructure and efficient logistics. The liberalization aims to attract greater foreign capital to boost Ethiopia’s competitiveness and trade volumes.

 

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