A Timely Economic Opportunity!

February 23, 2023

China has recently announced that it will allow Ethiopia to export its produces to China free of tax. This is a commendable decision that benefits Ethiopia in maximizing its export destination, foreign currency earning and supporting the economic growth .This opportunity should not be taken as an opportunity only to address the temporary problems like foreign currency shortage that the country faced, but also to further promote the country’s export items in the markets of China and beyond.

Ethiopia has been striving to build its economy through promoting its manufacturing sector. Accordingly it has devised a policy to promote the manufacturing sector. Ethiopia is endowed with rich potential of raw materials that can be input for various types of manufacturing industries. For decades it has been exporting it to different countries out of which it earned a minimal amount of foreign currency. However, in order to make the best out of its resource potential it is advisable to develop the manufacturing sector which can make use of these raw materials. By doing so, the country can create jobs to its growing number of youths. Furthermore, it can get more foreign currency that can be significant input for its economic development.

The important issue that determines success of developing its manufacturing industry is to find niche market for its industrial products. Through the economic diplomacy efforts, the country has managed to export its industrial products to some counties. Yet in order to address its ever growing need for foreign currency as well as to provide jobs for its working age people it needs to expand its export potential as well as destination.

One of the ways to boost its export volume is to use the quota and tax free export opportunities provided by the developed countries. For example, it has been benefitting from the United States provided the Africa Growth and Opportunity Act (AGOA) for years. However, it is to be recalled that the US government divided to delist Ethiopia from among the countries that benefited from the opportunity following the conflict that broke out in northern Ethiopia about two years ago. Ethiopia is still doing its best through diplomatic means to regain its privileges of export US market. In the meantime Ethiopia is lucky to get similar opportunity to export its produces free from tax and quota.

According to Ministry of Trade and Regional Integration (MoTRI) Ethiopia can now export some 1600 types of its export items to China. At a time when the country is in dire need of foreign currency, the opportunity can be said a timely one. Considering the strong bilateral relations of the two countries it can be said one of the signs of growing relations in the countries. Furthermore, Ethiopia’s private sector should take the opportunity to further build up its capacity to produce and export as many products as possible. Furthermore, this opportunity should be used to promote Ethiopia’s products to other countries and potential destination.

THE ETHIOPIAN HERALD THURSDAY 23 FEBRUARY 2023