Ethiopian Manufacturing Industry in Trouble After New Reforms

Ethiopian Manufacturing Industry is under immense pressure and considering exit from the market. The government, a month ago, liberalized foreign exchange market. The decision has caused serious problems for manufacturers. Due to liberalization of foreign exchange market, Ethiopian birr fell and lost around 100% of its value against US Dollar.

Following the government’s decision to determine the foreign exchange rate in the market, the manufacturing industries that had opened a bank letter of credit (LC) according to the previous exchange rate and made payments have now been told to pay again according to new foreign exchange rates.

Some manufacturing industries, which import various raw materials and carry out their work, risk losing money because of the sudden change in the foreign currency rates.

Commercial Bank of Ethiopia and Development Bank so far have not taken any steps to help the manufacturing industry. Those manufactures who made 100% payments according to previous foreign exchange rates and who are waiting for the raw materials for their companies to arrive in Ethiopia could exit market if they are forced to make payments according to new exchange rates.

Read more..

Addis Ababa Imports Onions from Tanzania