The Ministry of Trade and Regional Integration reports that contraband trade and taxes levied by regional administrations have cut into earnings from the export of khat and oilseeds.
Reporting to Parliament this week, officials told lawmakers that despite a record USD 6.7 billion in export revenues over the first eight months of the financial year, income from khat, oilseed, cereal, and livestock exports have declined owing to illicit trade and double taxation.
Ministry officials said while they expected upwards of USD 13.6 million from over two tonnes of khat exports in February, actual exports totaled just 858 tonnes and earnings fell short by USD four million.
The figure is 11 percent lower than earnings from February 2025.
Likewise, revenue collected from livestock exports decreased by 18 percent compared to last year, despite an increase in export volume. Cereal export revenue also fell by 25 percent compared to the previous year.
Ethiopia’s khat export destinations included Djibouti (6,100 tones), Israel (271 tones), Somalia (925 tones), Sierra Leone (183 tones), and other countries such as Kenya, Gambia, Central African Republic, Gabon, and Angola, which together formed the top eight destinations during the reporting period.
During the last eight months, top ten destinations for Ethiopia’s oilseed exports were the United Arab Emirates, Israel, Turkey, Singapore, China, the United States, Jordan, Pakistan, Vietnam, and India, according to the report.
Double and repetitive taxation, illegal trade practices, contraband, and checkpoints were cited as reasons for the decline in khat export revenue. For instance, Ethiopia’s khat exports to Israel dropped significantly from 52.3 tons worth USD 1.8 million last year to 21.3 tons worth USD 746,000 in the last eight months of the current fiscal year, with officials citing instability in the Middle East conflict as the primary cause.
Similarly, live animal exports have been affected by the high cost of quarantine, taxation, illegal trade practices, and the revised tax law introducing compulsory minimum alternative tax, the Middle East conflict, shipping costs, insurance and freight charges, and supply chain delays, according to the Ministry.
Officials attributed a fall in revenue from oilseed exports to illegal trade and disruptions to sesame production in northern Ethiopia. They also cited the expansion of illegal checkpoints disrupting transportation, price disparities between international and local markets, heavy-duty transport disruptions caused by conflict, and delays in timely supply.
On the other hand, earnings from gold exports surged to USD 3.6 billion over the reporting period, while total agricultural exports brought in USD 2.4 billion, according to trade officials. Manufacturing exports lag far behind at USD 333 million.
