Export

Import and Export Business in Ethiopia: Methods of Payment

An Ethiopian importer or exporter who is engaged in import or export business in Ethiopia should know what type of import export payments in Ethiopia are possible while doing import or export trade in Ethiopia or with Ethiopian businesses. Moreover, it should be known that which type of payment is preferable and under what conditions. This article contains the methods of payment practised in international import export business and especially what is practised or allowed in Ethiopia and deals specifically with Letter of Credit (LC), Cash against Document (CAD), Telegraphic Transfer (TT) and Advance Payment.It also contains documents to be included in a letter of credit and specifically in an LC opened through Ethiopian banks.

Most Exported Goods out of Ethiopia

Coffee has always been credited to be the Ethiopia's highest foreign currency earner. In terms of weight, however, the most exported goods out of Ethiopia in the last three years are pulses, oil seeds and spices. Using data obtained from Ethiopian Revenue and Customs Authority and Ministry of Trade and Industry, we have presented the most exported goods out of Ethiopa, their quantity in thousand tons, revenue earned in thousand USD.

Export Procedures and regulations in Ethiopia

According to Regulations No. 84/2003 or 84/1995 EC and its amendment 146/2008 or 146/2000 EC, export trade of raw coffee, chat, oil seeds, pulses, hides and skins bought from the market and live sheep, goats and cattle not raised or fattened by the investor is exclusively reserved for domestic investors. Foreign investors cannot be involved in export trade of these items from Ethiopia.

Businesses that wish to export from Ethiopia should know the export procedures needed to obtain export permit by commercial banks; should prepare Application for Quality Testing and Certification to obtain Export Authorization Certificate from the Quality and Standards Authority of Ethiopia; should fill the Customs declaration. We have included all these export procedures in Ethiopia and also the VAT registration for exporters from Ethiopia and VAT rate applied on goods exported from Ethiopia.

Export from Ethiopia

To be an exporter who exports from Ethiopia is a good business venture; Export from Ethiopia is growing and the government also encourages the export sector. Ethiopia's main export is coffee; Ethiopia is credited to be the birth place of coffee and it has long been the major export product of Ethiopia. Not only that, coffee plays a central role in the Ethiopian social fabric. According to the data we found from the Ethiopian Revenue and Customs Authority and Ministry of Trade and Industry, 176,390 mt of coffee was exported from Ethiopia in the budget year of 2007/08 and the country earned USD 424,144,000. USD 188,047,000 was earned from the export of oil seeds from Ethiopia and the export of GOLD, Chat (Qat), Hides and Skins, Pulses, and Flowers ranked from 3rd to 7th in earning the country a substantial amount of foreign currency. Ethiopia overall gained USD 1,185,083,000 from exports in the budget year 2007/08.