Ethiopia Orders Banks to Reject Requests for Foreign Exchange to Buy ‘Non-Priority Products’ – Africa Bitcoin News

Banks have been instructed by the Ethiopian government to refuse foreign currency requests to purchase so-called “non-priority” products. Melaku Alebel Addis from Ethiopia, Minister of Industry, has justified the decision by stating that this will help local manufacturers grow and compete. They will continue in place for an indefinite amount of time.

Remove foreign products from pressure

According to reports, the Ethiopian government instructed banks not to accept foreign currency requests to purchase non-priority goods. In a letter to the country’s central bank, the ministry reportedly stated that banks must only approve requests for foreign exchange if the customer’s objective is to import food, medicines, or medical equipment. According to the ministry, foreign exchange should be available for importers of raw material.

The apparent protectionist policy was justified by Melaku Alebel, Ethiopia’s Minister of Industry. He tweeted that new forex restrictions were necessary to give local products the chance. Addis argued that only countries with highly developed industries could achieve these feats without reducing or eliminating foreign product pressure.

Ethiopians’ Worsening Forex Woes

The second step, according to the minister, was the introduction of “their products to the world market and competing.” Addis ends the tweet by urging local manufacturers to take advantage of the policy change. Addis stated that:

This opportunity is yours to seize.

According to an AFP Report, motor vehicles are among the most affected products and imports by recent government foreign currency conservation measures.

The Ethiopian government, which has waged a bloody war against rebels in the country’s Tigray province, faces ongoing shortages of foreign exchange. At the same time, the gap between the local currency’s official and black market exchange rates has widened to a record high.

To counter the foreign exchange shortages as well as the Ethiopian birr’s depreciation, the country’s central bank — National Bank of Ethiopia — announced in September that it had revised downwards the amount of foreign exchange and local currencies Ethiopian travelers can take outside the country. The central bank previously advised against cryptocurrency trading.

Meanwhile, according to Addis, his government’s latest forex restrictions are set to remain in force for an indefinite period.

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Terence Zimwara

Terence Zimwara, a Zimbabwean journalist, writer and author who has been awarded the Zimbabwe Booker Prize. He is a prolific writer on the economic woes of African countries, as well as digital currencies that can be used to provide an escape path for Africans.