Ethiopian diaspora you must have this information from abele The government is wagging its finger at major sesame exporters suspected of under-invoicing, warning them to stay away from the act.
The Ministry of Trade & Industry sent a warning letter three weeks ago to the exporters, copying the National Bank of Ethiopia, the Ministry of Revenues, the Office of the Attorney General and the Ethiopian Commodity Exchange (ECX).
Signed by Misganu Arega, state minister for Trade & Industry in charge of the regulatory division, the letter urged the exporters to shy away from under-invoicing and threatened to take measures against those involved in under-invoicing including revoking their business licences and imposing other legal actions.
Continuous calls from the business community urging the Ministry to regulate the export sector, which is affected by unlawful practices and maladministration, triggered the Ministry to take the action, according to Misganu.
The Ministry, which is alarmed at the ever declining export revenue, sent the letters to exporters suspected of engaging in under-invoicing, according to Misganu.
"In the letter sent to the exporters, we've specified on which date and how much they under-invoiced their export values," Misganu told Fortune.
Some exporters have been buying the sesame from the ECX for an inflated value and exported the commodity with a price that is lower than what they paid at ECX. The Ministry also alleges that the companies used the foreign exchange they received from sesame exports to import products that generate huge amounts of profit, compensating for the value they lost in the export transactions.
Last month, sesame generated 563 million Br in revenue from transaction volumes of 8,902tn. The revenue was generated by 1,000 export licence holders in the country.
Apart from the warning letter, the Ministry vows to take different measures to curb under-invoicing, such as setting minimum prices for the commodities with the National Bank of Ethiopia, reviewing contract agreements of the exporters and reviewing the export licenses issued by the Ministry.
"Some of the exporters obtained the licenses not to transact exports but rather to get bank loans known as pre-shipment loans," Misganu told Fortune.
Between 55pc and 80pc of the illicit financial outflows leaving Ethiopia is traded using under-invoicing, which amounts to an estimated six percent to 23pc of the total value of the country’s trade, according to data from Global Financial Integrity, a Washington, DC-based think tank that produces analysis of illicit financial flows.