Coffee and khat exports earned Ethiopia close to 737 million dollars, which was 36.9pc of the total foreign exchange of two billion dollars that the country earned in the 2009/10 fiscal year with 36.5pc, 729.1 million dollars, coming from China.
Ethiopia’s foreign exchange income from exports for the year increased by 32.9pc to two billion dollars from last year’s 1.45 billion dollars, surpassing the 25pc the government had planned for.
Revenue generated by coffee and khat exports far exceeded that of last year, showing an increase of 40pc and 51.5pc respectively, while exports of leather and leather products plunged by 25.4pc.
The revenue from coffee, which was approximately 376 million dollars, increased to approximately 526 million dollars while the quantity increased from 134tn to 172tn. On the other hand, revenue from leather and leather products, which was 75.7 million dollars, went down to 56.5 million dollars.
The geographical distribution of the destinations for export items from Ethiopia remained more or less the same but saw the majority of exports shifting from Europe to Asia.
Germany, which in the first half of 2008/09 accounted for 34pc of the total foreign exchange earned by Ethiopia, was replaced by China, which accounted for 36.5pc of the total earned in the 2009/10 fiscal year. The biggest export item to China was sesame seeds.
The United States (US) followed as the second biggest destination for exports, accounting for 190.5 million dollars, 9.5pc of the foreign income, from coffee, wood, and leather products.
While the foreign exchange reserves had reached a dangerously low level in 2008, with only enough left for two weeks worth of imports, Teklewold Atenafu, governor of the National Bank of Ethiopia (NBE), reported to Parliament two months ago that it had enough foreign currency reserves for 2.2 months.
Foreign currency earned from exports is a major source for Ethiopia’s foreign exchange reserves.
Despite this increase, the country’s trade deficit stands at roughly 370 million dollars, the NBE reported. In an effort to narrow the gap and encourage exports, Ethiopia had to devaluate the Birr against the dollar in July 2009.
Encouraged by the performance of the export sector which went beyond their expectations, experts at the Ministry of Trade and Industry are setting their goals for the 2010/11 fiscal year higher, aiming for a 50pc increase in income from exports, setting the goal three billion dollars.
“Although this goal seems ambitious, we are encouraged by this year’s performance and expect huge income from exports of textiles and garments,” Amakele Yimam, corporate communications director at the MoTI, told Fortune. “We expect the textile industry to boom next year with four new factories expected to start production.”
By HAILU TEKLEHAIMANOT and SAMSON HAILU
FORTUNE STAFF WRITERS