BEHAK Exclusive: Trade between Germany and Ethiopia has been steadily growing in recent years. Germany is one of Ethiopia’s major trading partners, with a focus on machinery, vehicles, chemicals, and other manufactured goods.
Ethiopia, on the other hand, exports agricultural products such as coffee, oilseeds, and flowers to Germany. The total value of goods German exported to Ethiopia in 2022 has reached 8.8 billion Birr from 4.1 billion Birr in 2021, according to the statistics from Ethiopian Customs Commission Likewise, Ethiopia’s export to Germany, which was close 6.4 billion Birr in 2021 has increased to 13.4 billion Birr in 2022.
The trade relationship between the two countries has been strengthened by various agreements and partnerships aimed at fostering economic cooperation. Germany’s strong industrial base and technological expertise make it a key source of machinery and equipment for Ethiopia. For instance, from the yearn 2021-2022, German has exported to Ethiopia products worth total of 12.95 billion Ethiopian Birr. During this period the Government of Ethiopia has collected a total of over 2 billion Birr from import tax of these German products.
In addition, German companies have been involved in various infrastructure projects in Ethiopia, providing expertise and technology in areas such as energy, transportation, and manufacturing. Additionally, Germany has provided development aid to Ethiopia to support its economic growth and infrastructure development.
Ethiopia’s exports to Germany primarily consist of agricultural products. Coffee, in particular, holds a significant share of Ethiopia’s exports to Germany. The country is known for its high-quality coffee beans, and German consumers have shown a strong demand for Ethiopian coffee. In addition to coffee, Ethiopia also exports oilseeds and flowers to Germany. Between the year 2021-2022, Ethiopia has exported products to Germany that have a total value of 18.2 billion Birr.
The trade relationship between Germany and Ethiopia is not only limited to goods but also extends to investment and technical cooperation. German companies have shown interest in investing in various sectors of the Ethiopian economy, including renewable energy, agriculture, and manufacturing. This investment has the potential to contribute to Ethiopia’s economic development and create employment opportunities.
The trade relationship between the two countries has faced several challenges and opportunities in recent years.
Challenges
– Infrastructure: One of the major challenges in trade between Germany and Ethiopia is the lack of adequate infrastructure, such as roads, ports, and airports. This makes it difficult and costly to transport goods and people, which can hinder trade growth.
– Political instability: Ethiopia has experienced political instability and unrest in recent years, which has had a negative impact on trade between the two countries. Political instability can discourage investment and create uncertainty for businesses.
– Currency fluctuations: The Ethiopian birr has been subject to significant fluctuations in recent years, which can make it difficult for German businesses to predict the value of their investments and exports.
– Limited market access: Ethiopia has a relatively small market, which can limit the potential for German businesses to access new customers and markets.
– Cultural and language barriers: There are significant cultural and language differences between Germany and Ethiopia, which can create challenges for businesses looking to operate in the country.
Opportunities
– Growing demand for German products: Ethiopia has a growing middle class with increasing disposable income, which has created a demand for high-quality German products such as machinery, automotive, and electronics.
– Investment opportunities: Ethiopia is investing heavily in infrastructure development, which presents opportunities for German businesses to invest in sectors such as transportation, energy, and construction.
– Strategic location: Ethiopia is strategically located for trade with other countries in Africa and the Middle East, which can provide opportunities for German businesses to expand their reach.
– Diversification of trade: Ethiopia is diversifying its trade relationships beyond traditional partners such as China, which can create opportunities for German businesses to explore new markets and sectors.
– Government support: The Ethiopian government is actively promoting foreign investment and trade, which can provide opportunities for German businesses to access government support and incentives.
In general, the trade relationship between Germany and Ethiopia is characterized by mutual benefit, with Germany providing machinery and technology while Ethiopia supplies agricultural products. This partnership has the potential to further strengthen economic ties between the two countries and contribute to their respective economic growth.