Ethiopia Imposes New Restrictions on Goods Imports

The Minister of Finance of Ethiopia imposed new restrictions on imports of goods by banning the importing of goods through the Franco Valuta system. This decision, communicated in a letter to the Ethiopian National Bank and the Customs Commission, takes effect immediately. It marks a significant change in the country’s approach to foreign trade.

Franco Valuta allowed businesses to import goods using their foreign currency deposits. This system emerged as a solution to Ethiopia’s severe foreign currency shortages. For a time, it enabled the import of various products, including vehicles and essential goods, without the need for traditional banking processes.

Today’s announcement puts an end to this temporary measure. Importers who ordered goods through Franco Valuta must now submit legal purchase documents to the Customs Commission within two weeks. This requirement aims to facilitate the entry of previously ordered goods into the country.

Prime Minister Abiy Ahmed hinted at this change during a recent parliamentary session. He suggested that the government might take steps to control the outflow of Franco currency from Ethiopia.

These restrictions by Ethiopia will immediately affect businesses that rely on Franco Valuta for imports. Many companies may experience delays in receiving their goods. This disruption could lead to increased operational costs and impact supply chains.

Consumers may also feel the impact. Rising inflation and limited access to foreign currency could drive up prices for imported goods. As costs increase, everyday items may become less affordable for many households.

The ban on Franco Valuta imports marks a crucial moment for Ethiopia’s economy. The government aims to stabilize the currency and reduce reliance on non-traditional import methods. However, businesses and consumers face uncertainty in this new landscape. The next few weeks will be critical as stakeholders adapt to these changes and navigate potential price increases. How effectively the government manages this transition will determine its success in achieving economic stability.

Other Stories

Ethiopian Airlines Invests in DRC Aviation with Air Congo