Federal officials and private sector leaders are finalising the first consolidated trade policy, trying to spur resource mobilisation and unified implementation.
According to Trade & Regional Integration Minister Kassahun Gofe (PhD), there has been no consolidated official trade policy framework for over a century. He lauded the new policy initiative as a landmark step toward Ethiopia’s bid to join the World Trade Organisation (WTO), which he believes will reshape its bilateral trade engagements.
Ethiopia has already launched bilateral market-access talks with 12 of the 17 countries involved in its WTO accession process, including the United States (US) and the European Union (EU). Officials say a revised tariff book, set to be published soon, will facilitate its participation in the African Continental Free Trade Area (AfCFTA). Trade authorities credit a more streamlined business climate with issuing 2.5 million new or renewed licenses in eight months while bringing average licensing times down from 32 days to seven.
Ethiopia’s WTO aspirations date back to 2003, when policymakers recognised that global market access could help diversify the economy and entice foreign investment. Over the ensuing years, they cite overhauling the foreign currency regime, introducing a capital market, and revamping the management structures of state-owned enterprises.
"These measures form part of a broader initiative to open vital sectors to private and international participation," said Minister Kassahun.
He chaired a consultative meeting held on April 3, 2025, at the Haile Grand Hotel, Asmara Road.
"Modernisation should be carefully managed, but it is essential for lasting growth," he said.
Challenges remain, in part due to technical capacity.
At a January 2023 roundtable hosted by the Economic Commission for Africa (ECA), participants stressed the importance of specialised expertise in negotiating complex trade agreements and effectively implementing new regulations. The ECA pledged to support Ethiopia’s trade agenda, pointing out that improved market access could spur industrialisation and generate sustained economic benefits, provided the policy is well-crafted and inclusive.
Recent developments have accelerated momentum. In March 2025, at the fifth Working Party meeting on Ethiopia’s accession, delegates led by the Trade Minister vowed to finalise the process by March next year, coinciding with the 14th WTO Ministerial Conference to be held in Yaoundé, Cameroon. Federal officials say the new trade policy, shaped by several drafts, is crucial to sealing these agreements.
The process began with a diagnostic study stating the necessity of a coherent trade framework. It continued with stakeholder consultations, including chambers of commerce and businesses as well as industry associations.
The President of the Confederation of Ethiopian Trade Union (CETU), Kassahun Follo, decried the toll fees levied by regional states. He pointed to a soft drink company charged 5.8 million Br after traveling from Bahir Dar to Dejen and beer producers paying 24 Br a box in each region. He contended that such costs force companies to cut jobs.
Others stressed the policy’s aim to nurture a tech-savvy commercial environment capable of adapting to global competition.
“Frequent updates are essential,” said Ethiopian Oil & Grain Producers Association member Getachew Melese, referring to fast-changing trade patterns worldwide.
Another debate swirled around informal commerce, which employs a large segment of the population.
Shisema Gebresilassie, deputy commissioner of Addis Abeba’s Cooperative Commission, warned that compelling informal traders to formalise might undermine their livelihoods. The draft policy proposes forming new cooperative societies, though critics argue it could be more effective in strengthening existing ones. It also suggests imposing controls on select goods and services, including profit margins, prompting State Minister for Agriculture, Sofia Kassa (PhD), to question whether such measures align with free-market principles.
The Trade Minister insisted that adopting WTO standards should not compromise consumer protection. Officials say Ethiopia’s lack of a formal trade policy has hindered global market access and restricted foreign investment. According to Zafar Investment & Business Consultancy CEO, Mustefa Zafar, the policy gap has stifled technology transfer and prevented Ethiopia from moving beyond agriculture into manufacturing and services, leaving it with limited clout in global value chains.
Policymakers hope to attract foreign capital, expand export opportunities, and drive competition that could improve productivity. Proponents see potential for job creation in emerging sectors, though they concede domestic industries may struggle if multinational rivals enter too quickly. Greater exposure to external market swings could fuel volatility, and they fear inequalities might widen if gains from liberalisation are unevenly distributed.
Officials say they aim to mitigate these challenges by upgrading roads, railways, and energy infrastructure, enabling businesses to handle increased trade flows efficiently. They pledge to invest in workforce training, develop financial tools for cross-border transactions, and enact stronger intellectual property safeguards to encourage local innovation. While WTO membership could yield more predictable market access and dispute-resolution mechanisms, some worry it might open the door to large foreign players at a pace smaller domestic firms cannot match.
Consumer welfare was another point of contention, as policymakers want to prevent predatory pricing, ensure product safety, and maintain quality standards. However, advocates of faster liberalisation warn that an overly cautious approach could deter investment and hamper competitiveness.
The Minister has opened a 10-day window for interested groups to submit feedback on the draft, through email. The Council of Ministers is set to review the input and likely finalise the policy in a few months. Advocates say clear legal guidelines will boost Ethiopia’s reputation among global investors and encourage local entrepreneurs to scale up.
Critics caution that a poorly managed shift toward open markets could exacerbate inequalities or undermine nascent industries.
PUBLISHED ON
Apr 06,2025 [ VOL
26 , NO
1301]
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