[CAVIE-ACCI] Illicit import and export trade has become a major challenge to Ethiopia’s economy. It creates a triple threat to the financing of development by crowding out legitimate economic activity, depriving government’s revenues for investment in vital public services and increasing the costs of achieving the Sustainable Development Goals by eroding the progress already made.
Since recent times, illicit trade has also become a serious threat to the rule of law. The links between illicit trade and organized crime and the involvement of the organized criminal groups in the trade of counterfeit goods are well established.
The low production capacity level of Ethiopia’s small and Medium manufacturing enterprises also create favorable ground for illicit traders according to Eshete Assefaw, State Minister of Trade and industry in charge Quality, Trade and Regulatory Sector.
On the other hand, illicit trade is one of the major challenges that are hindering the growth of local producers in different sectors as the products entering the country illegally without paying tax are invading the country’s market and the local ones could not compete with the cheap price of the illegally imported products. In addition, it is resulting in billions of loss in government revenue.
While each form of illicit trade has its own characteristics and drivers, in Ethiopia, they often see the same routes, the same means of transport and the same concealment methods with multiple forms of illicit trade said, Debele Kabeta Customs Commissioner.
A segmented approach to tackling illicit trade also precludes Ethiopia’s ability to consider the interconnected nature of the problem and to appreciate commonalities and points of convergence across sectors, Debele told The Ethiopian Herald.
According to him, government stakeholders and the public are working to prevent illicit trade with its causes that have significant impacts on public safety and rescue the country’s economy and local manufacturers form its detrimental effect.
Due to the fact that the products that are imported into and exported out of the country via contraband are significantly large, it has become a huge source of concern in terms of its impact on the macro-economy. In fact, the illegally imported commodities have also posed a significant threat to the society in terms of safety and health.
The illegal trade in Ethiopia has been undertaken for a very long time and taken different shapes and routs, he said. In addition, the contrabandists have formed strong networks with corrupt government officials to conceal their illegal activity.
As to the officials, because of the different and continuously changing strategies adopted by the illegal traders, it needs a maximum contribution of the general public to control the contrabandists.
Since recently, the integrated works of the Ministry of Revenues, Customs Commission, Federal Police, and different Regional governments have been successful in seizing contraband goods and detaining the contrabandists.
For instance, recently in the month of December, the stakeholders’ integrated activities have managed to seize contraband goods worth 75.5 million birr within a week. Of these, the goods with a monetary value of some 63 million birr were set to be imported into the country while goods worth 11 million Birr were about to leave the country in the form of export illegally.
The materials also included 312 quintals of coffee, different countries’ currency notes, medical equipment, banned drugs, weapons/guns, electronic goods, cosmetics, machinery and spare parts, costumes, hide and skin and live animals. In addition, some 19 suspects have also been detained.
The contraband goods were seized through inspection and searches. Customs officials, in collaboration with federal and state police have played a key role in the process.
As to the state minister, there is a need to collaborate with neighboring countries to make the campaign against illicit trade more successful.