The National Bank of Ethiopia has recently undertaken a comprehensive review of its guidelines pertaining to the allocation and utilization of foreign exchange for the manufacturing sector. This revision holds significant promise for exporters, as highlighted by Mr. Zerihun Abebe, the Executive Director responsible for overseeing the Competitiveness of Export Products at the Ministry of Industry.
The earlier iteration of these guidelines had drawn attention to the limitations posed by the availability of foreign currency for exporters, thereby dampening their enthusiasm within the realm of international trade. The dwindling supply of foreign exchange due to broader national economic circumstances had contributed to a scenario where exporters found themselves lacking the necessary incentives to actively participate in the global market.
Zerihun Abebe emphasized that the latest decision by the National Bank’s Board of Directors heralds a pivotal shift in this landscape. The central focus of this decision is to ensure a consistent, timely, and sufficient allocation of resources to bolster the manufacturing industry. This, in turn, is anticipated to have a positive cascading effect on production output and overall productivity within the sector.
The Executive Director further elaborated that a noteworthy alteration has been made to the regulations governing foreign currency transfers by exporters operating in the manufacturing domain. Specifically, the requirement that exporters transfer foreign currency at a ratio of 70/30 has been revised to a more balanced 50/50 proportion.
In accordance with the updated guidelines, exporters are now directed to allocate 50 percent of their foreign currency earnings to the National Bank. An additional 10 percent is to be deposited with the banks they are affiliated with, leaving them with 40 percent for their own utilization. This strategic distribution is envisaged to foster a healthier and more equitable distribution of foreign exchange resources, fostering growth and stability across the manufacturing industry.
Mr. Zerihun Abebe underlined the importance of this decision as a vital driver of economic advancement within the sector at large. He strongly encouraged manufacturing enterprises to seize this opportune moment to enhance their production capabilities and overall performance. By adhering to the newly refined guidelines, manufacturers can potentially harness the benefits of improved access to foreign exchange, leading to increased competitiveness, expanded markets, and ultimately, a more robust economic landscape.
Source: https://www.facebook.com/people/Ethiopian-Ministry-of-Industry/100069332524480/
