Fortune News | Jun 11,2022
Dec 3 , 2024
Khat exports have nosedived over the past three months, a decline federal government officials attribute to a surge in illegal checkpoints that are disrupting trade routes and fueling contraband activities.
Khat exports have been declining for two years, a trend exacerbated by increasing competition from neighboring countries like Kenya. Ethiopia earned 180 million dollars from khat exports during the 2023-24 fiscal year, falling far short of the 450 million dollars target. Khat export revenues peaked at 402 million dollars in 2020-21 but have since declined to 391 million dollars in 2021-22 and 248 million dollars in the subsequent year.
In the past quarter alone, 2,580tns of khat was exported, generating 28.3 million dollars, a 35pc drop compared with the same period last year.
A recent study by the Ministry of Trade & Regional Integration (MoTRI), presented to Parliament, identified 283 unauthorised checkpoints across the country. They are established by regional and municipal authorities despite federal directives abolishing such taxes, impose illegal fees on khat shipments, disrupting flow of goods to international markets.
"This issue needs an immediate resolution," Trade Minister Kassahun Goffe (PhD) told federal legislators today, calling for collaboration among federal, regional, and municipal authorities to dismantle the unauthorised checkpoints.
His Ministry has launched a relicensing program for 300 khat exporters of the 4,900 registered. Over the past four months, more than 600 new licenses have been issued, with the relicensing efforts set to continue until December 9, 2024.
The recent downturn in export volume threatens not only government revenues but also the livelihoods of farmers and traders involved in the khat supply chain.
"We must take immediate action to restore khat's role as a major export commodity," Kassahun.
The Ministry's experts are exploring new markets to boost khat exports amid intensifying regional competition. However, analysts warn that unless the issue of illegal checkpoints is resolved and trade routes are secured, Ethiopia risks losing its foothold in the lucrative khat market.
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