Franco Valuta Imports: Customs Commission Sets New Guidelines

The Ethiopian Customs Commission has issued a new directive requiring all goods purchased through the Franco Valuta imports system to enter the country within one month. This decision aims to stabilize the economy and ensure the availability of essential commodities. Let’s explore what this means for importers and consumers.

Franco Valuta imports allows importers to use their foreign currency to buy essential goods. This system was designed to address shortages in the market. However, it has also led to complications, such as a black foreign currency market and regulatory compliance issues.

On November 26, 2024, the Customs Commission confirmed the new import timeline. Goods purchased under Franco Valuta must arrive in Ethiopia within one month. This announcement follows Finance Minister Ahmed Shide’s statement on November 13, which emphasized that all imports should go through regular commercial banks using Letters of Credit (LCs) or trust documents. The government aims to restore order to the foreign exchange market and reduce illegal trading activities associated with Franco Valuta.

The new directive will significantly impact both importers and consumers. Businesses that have relied on Franco Valuta must adapt quickly to comply with these banking regulations. This adjustment may involve more paperwork and potential delays in processing imports. Importers should prepare for these changes to avoid disruptions in their supply chains.

For consumers, the government’s efforts aim to stabilize commodity prices and improve the availability of essential goods in the market. However, temporary disruptions may occur during this transition period, affecting supply chains and pricing.

This shift away from Franco Valuta occurs amid ongoing economic reforms to stabilize Ethiopia’s currency and address inflationary pressures. While Franco Valuta helped prevent production shortages, it also created challenges in managing foreign exchange resources effectively.

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