To preserve foreign exchange reserves in one of the biggest African economies, Ethiopia has instructed its banks to forbid companies that import non-basic commodities from dealing with foreign currencies. The move actually freezes the import of dozens of commodities such as alcoholic drinks and cars, as businesses must register themselves with banks to obtain foreign currencies that it needs to bring products to the country.
The Ethiopian Central Bank received a letter from the Ministry of Finance explaining the need to limit the importation of foreign currency for the purchase of food, medication, medical supplies, and raw materials. The letter, published on Saturday, at the expense of the Minister of Industry, Malako Alibl Edis, said on Twitter: “Therefore,; We send a list of products that will not be purchased in foreign currencies for an unspecified period of time.
” The list consisting of 40 products includes vehicles, motorcycles, watches, umbrellas, carpets, soap, alcohol, perfumes and cigarettes. Recently, no figures pertaining to the amount of Ethiopia’s foreign exchange reserves were made public.
According to the local newspaper “The Riborter,” the National Bank of Ethiopia predicted that foreign exchange reserves would decline to $1. 6 billion by the end of 2021, which would be insufficient to finance imports for more than two months.
This month, the French Treasury Ministry noted in a quarterly bulletin that Ethiopia, whose economy is heavily dependent on imports, faces a severe foreign currency shortfall.
The import of non-essential products in foreign currency is prohibited in Ethiopia.
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