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Ethiopian Trade Deficit Remains High

Ethiopia’s trade deficit remains high in spite of notable increases in exports. The gap in the trade balance is failing to lessen because many raw materials used by significant projects, including infrastructure, are imported according to Abdurrahman Seid, Public Relations Deputy Coordinator at the Ministry of Trade.

Import requirements associated with infrastructural development in particular affect the trade deficit because of the massive infrastructure projects that are currently being implemented in the country he said.

It is expected that the difference in the trade balance will narrow as efforts to strengthen industrial sectors take effect explained Abdurrahman. The industrial and agro processing sectors are expected to increase national exports with a particular emphasis on value added products and to facilitate import substitution domestically he added.

Ethiopian exports tripled from 97.42 million kilograms worth 9.64 billion birr in 2006 to 1.13 billion kilograms worth 31.7 billion birr in 2010.

Exports made up 24% of imports in 2006 and just 26% in 2010.

A slight narrowing of the trade gap was noticed from January through November 2011 with exports estimated at 40.4 billion birr making up 30% of national imports.

Source: Capital