Radar | Apr 29,2023
Nov 8 , 2024
Ahmed Shide, minister of Finance, has banned merchandise imports under the Franco Valuta scheme, a system that allows importers to use their foreign currency without involving the central bank. The ban, excluding machineries and industrial raw materials, comes as the federal government wrestles with a foreign exchange shortage and mounting trade imbalances.
Officials argue that while the Franco Valuta scheme was initially intended to address forex shortages by facilitating essential imports, it has become a conduit for unregulated transactions undermining efforts to stabilise the Birr.
In the four years beginning in 2018, Franco Valuta transactions accounted for an estimated 2.1 billion dollars annually, of which over 60pc was linked to non-priority goods. The federal government has raised four billion Birr from taxes collected from imports made through franco valuta.
Importers have reportedly exploited the scheme to flood the market with non-essential items like luxury cars and electronics, exacerbating the country's chronic forex shortage.
Ethiopia's foreign exchange reserves have fallen to precarious levels, covering barely 1.7 months of imports, according to the IMF.
The parallel-market exchange rate has surged to 140 Br for a dollar, nearly 15pc above the official market, revealing waning confidence in the local currency.Critics, however, warn that the abrupt decision could choke supply chains and push more traders into the informal market. Industry insiders anticipate a rise in the price of consumer goods as traders scramble to adapt to the new rules.
The Ministry of Finance remains resolute. Minister Ahmed stated in his directive issued today, November 8, the government's commitment to "preserving the integrity of the financial system" and prioritising forex allocation for strategic imports. He offered a two-week window for merchandise imports made through the scheme to finalise customs procedures.
Radar | Apr 29,2023
Exclusive Interviews | Sep 07,2025
Radar | Apr 19,2025
Viewpoints | Nov 18,2023
Viewpoints | Jun 01,2019
Delicate Number | Nov 30,2024
Agenda | Aug 11,2024
Fortune News | Oct 27, 2024
Radar | Jun 22,2024
Advertorials | May 21,2024
Photo Gallery | 175271 Views | May 06,2019
Photo Gallery | 165495 Views | Apr 26,2019
Photo Gallery | 155806 Views | Oct 06,2021
My Opinion | 136794 Views | Aug 14,2021
Oct 18 , 2025
The political establishment, notably the ruling party and its top brass, has become p...
Oct 11 , 2025
Ladislas Farago, a roving Associated Press (AP) correspondent, arrived in Ethiopia in...
Oct 4 , 2025
Eyob Tekalegn (PhD) had been in the Governor's chair for only weeks when, on Septembe...
Sep 27 , 2025
Four years into an experiment with “shock therapy” in education, the national moo...
Loading your updates...