Trade Sector Report Final

Amhara National Regional State (ANRS)
TABLE OF CONTENTS
1.EXECUTIVE SUMMARY..........................................................................................................................i 2.BACKGROUND..........................................................................................................................................1 3.PROFILE AND SIZE OF THE AMHARA REGIONAL MARKET.....................................................4 3.1 General Market Characteristics and Features.....................................................................................4 3.2 Agricultural Products Marketing in the Region...................................................................................8 3.3Agricultural Product Market Structure................................................................................................11 3.4 Market Trends of Agricultural Products............................................................................................15 3.5 Manufactured Products Market in the Region...................................................................................19 3.6Trade Discipline in the Region.............................................................................................................25 4.EXPORT PROSPECTS AND POTENTIAL IN AMHARA REGION................................................27 4.1General.................................................................................................................................................27 4.2Export of Major Agricultural and Manufactured Products.................................................................29 5PROSPECTS AND POTENTIAL FOR GROWTH...............................................................................58 5.1Policy Implication for the Development and Integration of Trade......................................................58 5.2Export...................................................................................................................................................61 5.3Import...................................................................................................................................................64 5.4Project Ideas for Investment.................................................................................................................65 6PRICE TRENDS AND VARIATION.......................................................................................................70 6.1Prices of Major Agricultural Products.................................................................................................70 6.2Manufactured Food Products...............................................................................................................75 6.3Building Materials................................................................................................................................75 6.4Textiles..................................................................................................................................................76 7ENTREPRENEURSHIP DEVELOPMENT............................................................................................76 7.1ENTREPRENEURSHIP DEVELOPMENT IN AMHARA REGION....................................................77 7.2Entrepreneurship Development Paradigm...........................................................................................79 7.3Business Development Service (BDS) Needs in Amhara Region.........................................................81 8RECOMMENDATIONS...........................................................................................................................85
LIST OF TABLES
Table 1: Zonal Distribution of the Amhara Population by sex, 2004........................................................4 Table 2: Regional Comparison of Average Per Capita Expenditure........................................................5 Table 3: Licensed Trade Operators in Amhara Region..............................................................................7
Development Studies Associates (DSA) & Shawel Consult International (SCI)
Amhara National Regional State (ANRS) Table 4: Zonal Distribution of Trade Operators in Amhara Region, 2000/05.........................................8 Table 5: Estimated crop production and marketable supply from Amhara Region, 2001/02 (Quintal)...........................................................................................................................................................9 Table 6: Estimated Market Supply of Major Crops from Amhara Region, 1988 - 1997 (EC) ...........18 Table 7: Number of Industrial Establishments in Amhara Region.........................................................20 Table 8: Gross Value of Production and Value Added by Industrial Group in Amhara Region, 2001/02 (000 Birr)........................................................................................................................................21 Table 9: Import by Broad Commodity Group, 1997 - 2002, Country Level (000 Birr).......................23 Table 10: Estimated Import Share of Amhara Region, 1997 - 2002, (000 Birr)...................................23 Table 11: Ethiopia's Export by Selected Commodities, 1999 - 2004 ......................................................28 Table 12: Ethiopia's Export of Coffee by Country of Destination, 1999 - 2004......................................30 Table 13: Ethiopia's Export of Hides and Skins, 1999 2004..................................................................32 Table 14: Ethiopia's Export of Hides & Skins by Country of Destination, 1999 - 2004 ..........33
Table 15: Ethiopia's Export of Fruits, 2000 2004...................................................................................35 Table 16: Export of Fruits by Country of Destination, 2000 2004........................................................37 Table 17: Ethiopias Export of Vegetables, 2000 2004...........................................................................38 Table 18: Export of Vegetables by Country of Destination, 1999 - 2004................................................39 Table 19: Ethiopia's Export of Pulses, 2000 - 2004....................................................................................41 Table 20: Ethiopian Export of Pulses by Country of Destination, 2000 - 2004......................................42 Table 21: Ethiopia's Export of Spices, 2000 2004...................................................................................43 Table 22: Ethiopia's Export of Spices by Country of Destination, 2000 - 2004......................................44 Table 23: Ethiopia's Export of Oilseeds, 1999 - 2004................................................................................45 Table 24: Ethiopia's Export of Oilseeds by Country of Destination, 2000 2004..................................46 Table 25: Ethiopias Export of Cereals, 2000 2004................................................................................47 Table 26: Ethiopias Export of Cereals by Country of Destination, 2000 2004...................................48 Table 27: Ethiopia's Export of Live Animals.............................................................................................48 Table 28: Ethiopia's Export of Meat and Meat Products, 2000 - 2004....................................................50 Table 29: Ethiopia's Export of Honey and Beeswax by Country of Destination, 2000 2004.............51 Table 30: Tanzanias Exports of Beeswax by Main Destination Countries, 2003..................................52
Amhara National Regional State (ANRS) Table 31: Cte DIvoires Exports of Beeswax by Main Destination Countries, 2003...........................53 Table 32: Ethiopia's Export of Natural Gum by Country of destination, 2000 - 2004..........................54 Table 33: Ethiopia's Export of Cotton by Country of destination, 2000 - 2004......................................55 Table 34: Ethiopia's Export of Textiles by Country of Destination, 2000 - 2004...................................56 Table 35: Ethiopia's Export of Flowers by Country of Destination, 1999 - 2004...................................57 Table 36: Estimated Export of Amhara Region by Selected Commodities, 1998 - 2004.......................62 Table 37: Export Forecast for Amhara Region , 2005 2009..................................................................63 Table 38: Medium - Term Import Forecast for Amhara Region.............................................................64 Table 39: Average Prices of Major Agricultural Products in Amhara Region, 1991 - 1994.................70 Table 40: Farm Gate and Retail Prices of Agricultural Products..........................................................73 Table 41: Average Retail Prices of Manufactured Food Commodities in Amhara Region, 1991 1994 (Birr/kg).........................................................................................................................................................75 Table 42: Average Prices of Building Materials in Amhara Region, 1991 - 1994..................................75 Table 43: Average Prices of Textiles in Amhara Region, 1991 - 1994....................................................76
LIST OF FIGURES
Figure 1: Household Distribution by Income Group in Amhara Region .................................................6 Figure 2: Percent Distribution of Trade Operators in Amhara Region by Sector...................................7 Figure 3: Percent Distribution of Production and Market Supply..........................................................11 Figure 4: Agricultural products trade distribution channels in Amhara Region .................................12 Figure 5: Market Trends of Major Crops in Amhara Region ................................................................16 Figure 6: Market Structure for Manufactured Products in Amhara Region.........................................25 Figure 7: Export value of Coffee and Oilseeds .........................................................................................28 Figure 8: Volume of Export of Coffee and Oilseeds .................................................................................29 Figure 9: Percent Share of Live Animals Importing Countries, 2004.....................................................49 Figure 10: Price Seasonality of Major Crops.............................................................................................71
1.
EXECUTIVE SUMMARY
Amhara Region is the second largest market in the country, with a population of 18.6 million. It consists of trade operators, functioning at different levels and handling different product and service lines. Trade operators in the Region are growing in number every year, witnessing a growth in market size. The market is believed to grow at a rate equivalent to the growth rate that the trade operators in the Region attained. They grew at an average annual growth rate of 10.6%.
The Region supplies both agricultural and manufactured products to the domestic and export market, the former comprising the bulk of the market supply. The quantity supplied to the market depends on volume of agricultural production and capacity utilization of operational manufacturing establishments.
The Amhara Region market appears to be self sufficient in the supply of most agricultural products produced within the Region, except some crops which are not commercially grown there.
The share of the Region in the total production of fruits and other permanent crops was found to be negligible, despite its potential and suitability for the development of these crops.
Four sales levels are identified in the agricultural market structure of the Region. Agricultural products reach the end consumer in the Region or elsewhere in the country through these four levels, with some other intermediaries acting as facilitators in the process.
The Regions market supply trends of most crops in the cereal category appeared to be stationery or static, while the market supply of oilseeds and pulses exhibited an increasing trend, with an average annual growth rate of 8% and 7% respectively in the last ten years.
The Region is believed to consume imported commodities worth on the average about Birr 2.6 billion during the period 1997 2002. Consumer goods of durable
and non-durable types accounted for the largest share, followed by semi-finished goods and industrial & transport capital goods in that order of importance. The contribution of the Region to the export earning of the country mainly from export of hides and skins, oilseeds, pulses, spices, live animals and natural gums is believed to be substantially high. The bulk of the export from the Region as is the case from the rest of the country comprised primary agricultural products. The expected export earnings from agricultural products are characterized with severe fluctuation from year to year due to falling world agricultural commodity prices. The Regions export in the next five years is expected to grow from an estimated current value of Birr 729.5 million to Birr 1,044.8 million by the year 2009 in the case of highest estimate, while in the medium estimate it is expected to range from a current value of Birr 493.7 million to Birr 996.7 over the same medium term forecast period. The import share of the Region in the next five years is expected to fall between a current share of Birr 5.8 billion and Birr 6.5 billion by the year 2009.
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2.
BACKGROUND
Amhara National Regional State (ANRS) is one of the regional states of Ethiopia and is located in the north-western part of the country. It lies between latitude 9 13 45N and longitude 36 40 30E, with an estimated total area of 170,152 km 2. The Afar Regional State borders it from the east, while Benishangul, Oromia and Tigray regions of the country border it from south-west, south and north, respectively and the Sudan from the west. Its altitude ranges from 600 meters above sea level at Metema, North Gonder, to 4520 meters above sea level at Ras Dashen, North Gonder, which is also Ethiopias highest point. The wide range of altitude is a major factor in determining the temperature range of the region. Generally, lowland areas (below 1500 meters above sea level) experience hot temperatures, while highland areas (above 1500 meters above sea level) experience relatively cooler temperatures. For instance, in the hot to warm sub moist agro-ecological zone, where the altitude ranges from 600 to 1400 meters above sea level, the mean annual temperature is estimated to range from 21 C to 27C while in the cold to very cold moist zone, where the altitude ranges from 2800 to 4200 meters above sea level, the mean annual temperature varies between 7.5C and 16C. The region, with an estimated population of 18.6 million, is the second largest and represents about 25% of the total population of the country. It has diverse agro-ecological zones which are suitable for production of different varieties of seasonal and permanent agricultural crops and for raising different species of livestock. According to the Central Statistical Authoritys agricultural sample enumeration reports of the year 2001/02, the region represents about 30%, 46%, and 40% of the countrys total production of cereals, pulses and oilseeds, respectively. It also stands second in terms of livestock population, representing on the average 28% of the countrys total livestock size. A good proportion of the countrys export commodities mainly agricultural and to some extent semiprocessed or manufactured products originate from this region as well. A recent study of the Bureau of Agriculture of the Amahara Region under the title Agricultural Marketing System Study quoted a source that about 45%, 21%, 53%, 9% and 15% of the countrys
export of pulses, oilseeds, live animals, incense and spices, respectively, were contributions from the Amhara Region. In general the economic contribution of the Region in terms of the size of exploitable natural resource remains to be immense. The Investment Bureau of the Region, having committed itself to streamline the economic development of the Region, requested the services of multidisciplinary consultants to conduct a survey on the resource potential of the region with an overall objective of identifying opportunities for investment and enhancing the participation of private capital in the Regions economy. In view of this objective the Development Studies Associates, commissioned to undertake the resource potential survey, conducted a market situation analysis to identify market opportunities, within and outside the Region, which would enhance the investment portfolio of the Region and market constraints that are expected to have a retarding impact on the economic development of the Region. The situation analysis was conducted using both desk and field research methods. The quantitative data utilized and reflected in this report all originated from existing data sources of secondary nature. Data on volume of production of agricultural products were compiled and analyzed to establish the trends of marketable volume to be supplied to local markets within the Region, to markets in the rest of the country and to international markets. The size of the population of the Region with other macro indicators was also compiled to establish the import requirement of the Region. Secondary data on export were also organized and analyzed to identify the export share of the Region and its potential for growth. The major sources for the secondary data used in this report include the Central Statistical Authority and the Ethiopian Customs Administration Authority. Other relevant sources were also accessed for supplementary information. The use of primary data in this report is limited. The consultant engaged in the preparation of this report spent nearly a week in Bahir Dar to hold a discussion with key individuals in the trade sector and to compile trade-related information from the different offices in the Region. Accordingly the consultant visited some offices comprising both government and private institutions such as Agriculture and Trade and Industry Bureaus, Guder Agro Industry, Women Entrepreneur Association of the Amhara Region,
Cooperative Operation Promotion office, Bahir Dar Chamber of Commerce, Amhara Saving and Credit Institution, Bahir Dar Textile Factory, Fish Marketing Enterprise, Bahir Dar Edible Oil Factory, Agricultural Research Institute etc. Discussions on market constraints and prospects were held with experts drawn from each office visited and their views and comments are incorporated in this report.
3. 3.1 a)
PROFILE AND SIZE OF THE AMHARA REGIONAL MARKET General Market Characteristics and Features Population
Population size and composition is a major factor that contributes to development of a market. A market can be broadly divided into consumer and industrial markets. Both markets are highly influenced by population size and composition. Amhara Region thus stands as the second largest market in the country in terms of population size. The population of the Region in 2004 was estimated to be around 18 million, representing about 26% of the total population of the country. The Region is administratively structured into 11 administrative zones with a population distribution as presented in Table 1.
Table 1: Zonal Distribution of the Amhara Population by sex, 2004
Zone North Gondar Zone South Gondar Zone North Wello Zone South Wello Zone North Shewa Zone East Gojjam Zone West Gojjam Zone Wag Hemra Zone Agew Hawi Zone Oromia Zone Bahir Dar Special Zone Total Country Level % share
Male 1,391,791 1,170,388 821,845 1,372,544 1,025,211 1,102,165 1,158,690 178,839 466,247 303,325 78,955 9,070,000 35,618,000 25.5
Female 1,359,966 1,134,835 823,285 1,418,824 1,023,457 1,124,712 1,158,245 178,487 474,063 303,297 73,832 9,073,003 35,448,00 0 25.6
Total 2,751,757 2,305,223 1,645,130 2,791,368 2,048,668 2,226,877 2,316,935 357,326 940,310 606,622 152,787 18,143,003 71,066,000 25.5
Source: Statistical Abstract, Central Statistical Authority, 2003 The Amhara Regional market is expected to expand as its population increases. Over the next five years, 2005 up to 2010, the population is expected to grow at a yearly average
growth rate of 2.57% (CSA, 1994) bringing market expansion in terms of units of consumers. However, the volume of transaction in the Region may grow at a much faster rate than the population growth, depending on prevailing market prices of commodities and purchasing power of the consumer. b) Income
The importance of a market is further explained by the size of the income of the population that it serves. The purchasing power of the population depends on the real disposable per capita income of the population. The economy of the Amhara Region like that of all the other Regions in the rest of the country predominately depends on agriculture. Disposable income generated from agriculture in a developing economy like ours cannot be strong by itself to initiate market development. However, as income grows steadily and its sources become more diversified, dependence on exchange of goods and services become imminently strong leading to market diversification and growth. The per capita income in Amhara Region which was noted to be the lowest in 1995/96 has shown better improvement in 1999/2000 compared to incomes in other Regions of the country. It increased from Birr 1032 in 1995/96 to Birr 1252 in 1999/00, corresponding to a 21% rise, while a significant drop prevailed in many of the other Regions of the country (for comparison see Table 2).
Table 2: Regional Comparison of Average Per Capita Expenditure1 1995/96 1999/2000 Survey Survey % change Tigray 1,281 1,198 -6.48 Afar 1,588 1,154 -27.33 Amhara 1,032 1,251 21.22 Oromia 1,361 1,298 -4.63 Somali 2,008 1,442 -28.19 Benishangul 1,127 1,176 4.35 SNNPR 1,115 1,151 3.23 Gambella 1,774 1,209 -31.85 Harari 2,472 1,763 -28.68 Addis Ababa 1,774 1,976 11.39 Dire Dawa 1,697 1,451 -14.50 Source: The 1995/96 and 1999/200 Household Income, Consumption and Expenditure Survey, Region Central Statistical Authority.
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Per capita expenditure is used as a proxy estimate for per capita income. Development Studies Associates (DSA) & Shawel Consult International (SCI)
The proportion of households below an income of Birr 1,999 was estimated to be about 16% in 1995/96, while in 1999/2000 the proportion dropped to 12% as a result of some households moving to the next high income group. The majority of the households in the Region fall in an income group of Birr 2000 6,599 during the two periods, 74% and 71% respectively. However, in 1999/2000 quite a good proportion of households joined the next income group which is Birr above 6,600. Refer to Figure 1 for further understanding the pattern of the movement. The per capita income rise observed in the Region may have brought either some change in the structure of the market or contributed to market expansion in the Region. In any case a market is believed to flourish as long as the per capita income of the population being served in that market exhibits a positive change over time.
Figure 1: Household Distribution by Income Group in Amhara Region Figure 1 Household Distribution by Income Group in Amhara Region
20 18 16 14 % of Households 12 10 8 6 4 2 0
0 -9 99 99 9 39 9 19 9 59 9 99 9 <6 0 39 59 39 25 9 -1 61 -1 99 >2 0 -6 -1 -1 -2 -3 -4 -5 -8 00 0 9 9 9 9 99 99
1999/2000 Survey 1995/96 Survey
60 0
00
00
34 00
00
66 00
-1 0
10 0
20 0
42 0
0 12 60
14
26
54
90 0
Income Interval in Birr
c)
Size and Types of Trade Operators
There are five levels of trade operations in the Region (see Table 3). The Region currently has a total of 48,003 licensed trade operators, excluding handicraft and cottage establishments which are estimated to be around 262,800 in number. Retail trade operation is noted to be the dominant in the existing trade regime and significant numbers
16 2
00
of new entrants are joining this sector every year, except in 2000/01 where a decline was noted. In general over the past few years, with the exception of 2003/04 for which information was not available from the source, the number of new entrants almost in all sectors exceeded that of trade operators withdrawing or failing to renew license, showing a positive net increase every year. For instance, the total number of retail trade operators jumped from 18,325 in 2002/03 to 28,825 in 2004/05, corresponding to nearly 58% increase. Similar growth pattern was noted in the remaining sectors as well. A summary of the composition of the Regions trade regime is presented in Figure 2.
Table 3: Licensed Trade Operators in Amhara Region2
Type of License Wholesale Trade Retail Trade Service Trade Industry Agriculture Grand Total
1999/2000 2000/01 2008 16894 7319 2650 41 28912 1641 15605 5972 4282 49 27549
2001/02 1380 15823 6720 4132 42 28097
2002/03 1779 18325 7842 4273 87 32306
2003/04 NA NA NA NA NA NA
2004/05 2572 28825 8969 7472 165 48003
Source: Bureau of Trade and Industry, Amhara Regional State

Figure 2: Percent Distribution of Trade Operators in Amhara Region by Sector
Agriculture 0% Industry 15%
Wholesale Trade 8%
Service Trade 18%
Retail Trade 59%
An individual or a trade entity may have one or more licenses within a sector or in different sectors. The number of license shown above may not correspond to the actual number of trade operators. Development Studies Associates (DSA) & Shawel Consult International (SCI)
Zonal distribution of trade operators along with the size of the population that they are serving are presented in Table 4. North Shoa Zone, the fifth largest in population size, has the largest number of trade operators, while South Wollo, ranking first in population size, follows by a quarter less. That means population size is not the only factor that influences the size of a market. A market appears to be large when it accommodates relatively a large number of trade operators. A market becomes additionally attractive to trade operators if it serves as an outlet to other markets outside the region. This could be one of the reasons for North Shoa, which is in close proximity to Addis Ababa, to entertain relatively a large number of trade operators.
Table 4: Zonal Distribution of Trade Operators in Amhara Region, 2000/05 Estimated Amhara Regional Population Wholesale Retail Service Zones Size Trade Trade Trade Industry East Gojjam 2,289,265 214 3,205 1,058 1,300 West Gojjam 2,396,155 20 2,180 281 279 North Gondar 2,812,129 1,565 2,820 1,190 417 South Gondar 2,381,357 229 1,844 683 582 North Wollo 1,696,845 78 2,697 695 341 South Wollo 2,859,412 187 5,606 1,538 1,141 North Shoa 2,101,561 173 6,803 1,996 2,344 Hawi 965,457 56 2,055 428 534 Oromia 623,301 3 545 253 175 Wag Hemra 371,078 20 194 73 99 Bahir dar 129,439 27 876 774 260 Total 18,625,999 2,572 28,825 8,969 7,472 Source: Bureau of Trade & Industry, Amhara Region
Agriculture 5 0 39 3 6 3 5 2 78 0 24 165
Total 5,782 2,760 6,031 3,341 3,817 8,475 11,321 3,075 1,054 386 1,961 48,003
3.2
Agricultural Products Marketing in the Region
The Region supplies agricultural products both to the domestic and export markets. The domestic market refers both to the markets within the Region and others found in the rest of the country. The agricultural products marketed from the Region comprised cereals, pulses, oilseeds, spices, fruits, vegetables, livestock and livestock products, fresh water fishes, honey and beeswax etc. The quantity marketed depends on volume of production. However, much of the agricultural land holdings in the Region as in the rest of the country are under small private peasant holdings, which produce in most instances for subsistence. In spite of this prevailing condition the bulk of the market supply originates from these small holdings. A large majority of the farmers in the country lead their
livelihood on the basis of a thrift household management. That means what the farmer supplies to the market is not what one calls marketable surplus, but it is an amount that he keeps aside from what he is supposed to consume until next harvest period in order to meet his other needs. The Central Statistical Authority, in its agricultural sample survey conducted in 2001/02, has established the volume in percentage of total production that a farmer supplies to the market after every harvesting season for every region in the country. In Amhara Region, according to the above estimate, 13% of cereals produced are marketed, while for pulses, oilseeds, vegetables, fruits, spices3 and other permanent crops the percent marketed stand at 18.7%, 49.4%, 20.6%, 62.7%, 18.7% and 39.7% respectively. Detailed breakdown of these estimates by crop types are provided in Table 5. Amharas largest supply contribution to the domestic markets comes from its cereals and vegetables production. For instance in 2001/02 the market supply of cereals and vegetables from Amhara Region alone were estimated at 3,163 thousand and 1,037 thousand quintals respectively. The Region also depends much for household consumption on these two agricultural product groups. The farmer appears to consider oilseeds and fruits as cash crops to be destined for the market as nearly 50% of the production of the former and 63% of the latter are marketed. The former is usually a raw material for edible oil manufacturing plants and the latter being easily perishable will have to be sold out immediately. The farmer, therefore, very well knows that he would derive more benefit by selling than using them for home consumption.
Table 5: Estimated crop production and marketable supply from Amhara Region, 2001/02
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(Quintal)
The figure for spice only refers to the reported two cases. Figures for commercially important spices are not provided from the source. Development Studies Associates (DSA) & Shawel Consult International (SCI)
Production estimates Type of Crop CEREALS Teff Barley Wheat Maize Sorghum Finger millet Oats Rice PULSES Horse beans Field peas Haricot beans Chick peas Lentils Vetch Soya beans Gibto OILSEEDS Neug Linseed Groundnuts Safflower Sesame seed Rapeseed Fenugreek National 91,599,718 16,573,329 9,867,355 14,837,367 30,862,098 15,826,273 3,091,170 387,125 155,001 10,869,537 4,514,252 1,548,667 1,521,661 1,856,272 416,201 936,000 16,717 59,768 2,244,713 848,023 526,167 141,776 46,181 406,472 169,540 106,554 Amhara Region 27,814,312 7,093,620 3,360,659 3,641,102 6,527,109 5,259,659 1,682,932 116,823 132,408 5,015,817 2,111,647 685,498 178,479 1,089,787 288,588 600,380 2,068 59,370 915,074 451,308 106,794 37,860 136,728 122,621 59,763 Amhara's % share 30.4 42.8 34.1 24.5 21.1 33.2 54.4 30.2 85.4 45.7 46.8 44.3 11.7 58.7 69.3 64.1 12.4 99.3 40.0 53.2 20.3 0.0 82.0 33.6 72.3 56.1 % marketed 13.0 20.6 6.9 11.8 9.8 12.5 14.3 6.2 20.2 18.7 11.4 14.2 23.7 18.4 37.9 21.3 39.4 19.3 49.4 63.3 22.0 78.4 26.9 50.9 54.2 59.2 Volume marketed 3,613,079 1,463,414 233,230 429,286 636,393 656,931 239,986 7,278 26,733 935,951 240,305 97,341 42,317 199,976 109,259 127,881 815 11,470 451,681 285,723 23,516 0 10,181 69,567 66,448 35,362
VEGETABLES Lettuce Head cabbage Ethiopian cabbage Tomatoes Swiss chard Beetroot Carrot Onion Potatoes Garlic Sweet potatoes Taro/Godere SPICES Green peppers Red Peppers FRUITS Avocado Bananas Guavas Lemons Mangoes Oranges Papayas OTHER CROPS Chat Coffee
21,338,101 13,869 72,079 2,121,866 347,277 11,897 55,406 76,882 2,572,053 9,402,088 794,211 3,896,124 1,974,349 1,196,790 417,165 779,625 2,038,462 147,160 1,245,616 19,400 12,021 212,750 154,625 246,890
5,045,865 9,173 34,893 2,583 7,469 14,140 1,229,512 3,393,534 337,303 17,258 275,452 79,483 195,969 18,353 * 4,290 2,271 795 25 8,016 2,956
23.6 12.7 1.6 0.0 21.7 13.5 18.4 47.8 36.1 42.5 0.4 23.0 19.1 25.1 0.9 0.3 11.7 6.6 0.0 5.2 1.2
20.6 62.7 5.3 73.1 22.8 55.8 67.9 45.4 11.3 20.3 30.7 18.7 13.4 20.9 62.7 100.0 68.2 43.7 72.3 48.6 73.6 37.2
1,037,704 5,754 1,835 589 4,169 9,594 557,707 384,148 68,607 5,300 51,518 10,659 40,860 11,502 2,924 992 574 12 5,899 1,101
3,719,462
809,497 1,665,791
86,763
9,674 12,772
2.3
1.2 0.8
39.7
75.7 36.6
34,454
7,323 4,669
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Production estimates Type of Crop National Amhara Region Amhara's % share % marketed Volume marketed
Hops 253,384 54,740 21.6 Sugar cane 990,790 9,577 1.0 Source: Statistical report on Area and Production of Crops, Central statistical Authority, 2003
29.4 66.3
16,115 6,346
The share of the Region in the nations production of fruits and other permanent crops as noted above appears dismally small in spite of its high potential and suitability for the development of these crops. A summary of the contribution the other regions and Amhara Region made to the national production of major agricultural crops and market supply from the latter are presented in Figure 3.
Figure 3: Percent Distribution of Production and Market Supply
1 00 90 80 70 60 50 40 30 20 1 0 0 Cereals P ulses Oilseeds Vegetables P roduction Amhara Fruits Other Crops
P roduction other Regions
Market Supply Amhara
3.3 Agricultural Product Market Structure
Agricultural products from the Region pass from the producer to the consumer through four sales levels in general. However, there are intermediaries involved in facilitating the passage of agricultural products to the final consumer at various points within the system.
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Production level
Wholesale level
Retail level
Consumer level
A detailed diagram, though indicative, showing all the actors involved in the distribution of agricultural products in the Region is presented in Figure 4.
Figure 4: Agricultural products trade distribution channels in Amhara Region
Producers
Assemblers or village collectors
Farmers' co-operative organizations
Processors
Wholesaler
Exporter
Export market Retailers (incl. supermarkets, open-air markets)
Consumer
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Production Level
Agricultural production in the Region as in the rest of the country is largely dominated by private small holdings. Supply is also supplemented by small-scale producers and commercial farmers, especially in the production of cash crops. At this level the producer decides how much to keep for own consumption, for seed and for other personal use. The remaining balance is released to the market through any one of the channels indicated above. In places where the producer has easy access to market places, transaction with retailers and consumers is conducted without other intermediaries being involved in the process. Assemblers/Village Collectors level
A recent study on Agricultural Marketing System conducted by the Bureau of Agriculture in Amhara Region identified three levels of assemblers/village collectors. The study pointed out that the major ones doing the assembly service were farmer traders particularly in remote rural markets. The second type includes assemblers that deploy their own capital on a full-time basis to buy grains and other agricultural products from the producer and resell them to wholesalers, processors, exporters and local retailers. The third type is simply an agent for wholesalers, processors and exporters. He assembles agricultural products on their behalf. Farmers Cooperative Organizations Level
The Amhara Cooperative Promotion Bureau assumed a prominent role in building up the capacity of small holding farmers and others engaged in the Region's other economic regime. The Bureau provides technical assistance to farmers who are willing to work under the umbrella of a cooperative society and register them as legally established cooperative organizations. There are at present a total of 1056 cooperative organizations in the Region. A majority of them (about 884) are multi-purpose agricultural cooperative organizations. Others are specialized ones who are mainly engaged in irrigation, dairy, fishery, natural gum and incense, apiculture etc. developments. These cooperative organizations assemble the produce, which is destined to market, of their members in a commercial volume and sell them to wholesalers, processors and exporters. Cooperative
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organizations would enable members to strengthen their bargaining position in the market and supply the market with reasonable commercial volume instead of small quantities as is the case at individual farmer level. Wholesale level
Wholesaling is the act of selling in bulk to the next level in the distribution channel. There are as indicated earlier a total of 2,572 trade operators in the Region engaged in wholesaling activities, though not all of them are in the business of agricultural products wholesaling. There are grain, coffee, cotton, live animals, hides and skin etc. wholesalers operating in the Region. Their function is not only buying agricultural products originating from the Region; they are also engaged in distributing products of the same from other regions of the country to retailers in the Region. For instance coffee wholesalers supply coffee grown in other regions of the country to retailers in Amhara Region as commercial growing of coffee in the Region is not well developed yet. Retail Level
The retail level is the last point in the system where goods are channeled to the final consumer. It comprised as indicated earlier large numbers of operators compared to the level preceding it, that is the wholesale level. The number of retailers usually depends on the size of the consumer market and degree of market competition. Processors
Industrial establishments such as flour mills, oil mills, ginneries, textile factories, tanneries, beverage factories, spice extractors etc. are the major buyers of agricultural products from the Region. They are either located within the Region or elsewhere in the country. The agricultural products these processors buy are raw materials such as hides and skins, cereals, oilseeds, cotton, pepper etc. They keep large stock depending on their financial position and capacity utilization rate of their plants. The processors thus either deploy their agents to producers' sites to assemble the raw material they need for their industry or make purchase arrangements direct with independent assemblers and/or cooperative organizations.
14
Exporters
Amhara Region is the major source for the country's export of primary agricultural products such as pulses, oilseeds, spices and natural gum. Exporters who are mainly located in Addis Ababa buy these agricultural commodities from independent assemblers, cooperative organizations and medium and large scale agricultural producers. Some exporters invested in the agricultural sector in the Region to produce what they export. 3.4 Market Trends of Agricultural Products
The volume of agricultural products supplied to the domestic and export markets to some extent depends on the size of the market and production. Time series data available at regional level from the Central Statistical Authority's (CSA) Agricultural Sample Survey were used to identify market trends of agricultural products destined for sale. However, data on market supply at regional level are scarce for all the years considered in the trend analysis except one estimate for 2001/02. That part of production estimated to be released to market in the agricultural sample enumeration results of CSA for the year 2001/02 was applied to derive the market supply for the rest of the years under review. Therefore reference is made to the percent distribution of marketable portion of the production over specific crops given in Table 5 above to estimate the market supply for each year under review in the trend analysis.
The market trends for the major crop groups, namely, cereals, pulses and oilseeds are illustrated in Figure 5. Production and market supply estimates for other crops such as spices, vegetables, fruits and other permanent crops were incomplete in most cases and are thus omitted from the analysis.
15
Figure 5: Market Trends of Major Crops in Amhara Region

4,500 4,000 3,500 3,000
Market supply ('000 Quintal)
2,500 2,000 1,500 1,000 500 0

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Years in EC
Cereals Pulses Oilseeds
The market trends of cereals, which were marketed from the Region both to the domestic and export markets, appeared nearly stationery or constant over the last ten years. The quantity released to market ranged from 3,499.3 thousand quintals in 1988 (EC) to 4,050.5 thousand quintals in 1997 (EC), corresponding to an average annual growth rate of only 0.2%. Although in terms of absolute value cereal supply appeared to represent the lion's share of all marketed agricultural products, the change from year to year remained to be insignificant. This applies to specific crops within the cereal crops category, with the exception of wheat which exhibited quite a good increment over each subsequent year. This could be attributed to the wheat variety that the Amhara Bureau of Agriculture introduced to comply with the type of wheat flour mills of the Region and elsewhere in the country need as raw materials. For detail see Table 6.
There is a clear increasing trend observed in the market supply of both pulses and oilseeds. The former increased from 539,833 quintals in 1988 to 999,687 quintals in the current year, with an average annual growth rate of 7%. The latter on the other hand grew at an average annual growth rate of 8%, reaching from a supply of 400,830 quintals in 1988 to 806,819 quintals in 1997.
16
A straight trend line that adequately explains the movement over the period under review can be fitted to these sets of data representing the two groups of crops. Accordingly the trend line fitted for the movement of pulses over the period 1988 - 1997 is explained by the following linear equation: yp = 459.53 + 48.8t, where yp represents market supply of pulses and t time.
The regression line explains about 85% of the variation, implying the equation to be the best fit with a correlation coefficient of 0.92. Similarly a linear trend line for oilseeds turned to have the following linear regression equation: yo = 315 + 37.01t, where yo represents oilseeds market supply and t time.
17
Table 6: Estimated Market Supply of Major Crops from Amhara Region, 1988 - 1997 (EC) Crop Type
CEREALS Teff Barley Wheat Maize Sorghum Finger millet Oats Rice PULSES Horse beans Field peas Haricot beans Chick peas Lentils Vetch Soya beans Gibto OILSEEDS Neug Linseed Ground nuts Sunflower Sesame seed Rapeseed Fenugreek 1988 3,499,293 1,465,601 244,140 279,594 560,634 709,290 228,134 10,677 1,224 539,833 145,284 77,732 29,590 123,262 91,693 72,271 1989 3,868,367 1,595,516 213,492 249,211 521,874 1,001,848 271,090 4,541 10,796 566,024 136,954 50,396 34,382 150,809 68,833 124,650 1990 2,596,384 1,093,918 199,466 250,885 381,444 448,435 203,870 3,028 15,338 537,063 99,912 39,861 20,466 163,724 73,108 139,992 1991 3,417,416 1,522,657 140,518 290,727 515,259 632,230 310,894 5,130 579,801 134,245 51,072 78,151 158,871 68,352 89,111 1992 3,254,704 1,508,952 141,285 385,750 513,358 462,060 236,421 6,020 858 814,284 217,429 68,906 116,276 166,346 123,155 122,173 1993 3,785,692 1,593,880 196,780 382,081 636,608 712,918 255,180 8,226 20 777,486 215,786 90,248 68,695 154,351 141,559 106,847 Quintal 1994 1995 3,693,251 3,720,227 1,463,414 1,524,452 233,230 202,967 429,286 404,758 636,393 634,527 656,931 684,925 239,986 247,583 7,278 7,649 26,733 13,367 829,365 800,553 240,305 228,046 97,341 93,028 42,317 55,506 199,976 176,650 109,259 123,817 127,881 117,364 815 407 11,470 5,735 473,443 520,344 285,723 362,911 23,516 21,300 29,686 14,878 36,766 26,334 62,390 50,374 12,927 35,362 31,618 1996 3,710,536 1,509,413 254,773 488,778 457,062 754,333 221,859 5,225 19,095 834,974 245,167 121,578 91,408 161,050 97,864 108,608 9,299 678,970 366,600 24,763 29,098 11,860 72,370 132,324 41,954 1997 4,050,534 1,678,563 276,882 671,319 484,752 707,625 184,587 6,425 40,380 999,687 308,317 137,635 72,924 181,290 139,886 147,653 3,671 8,311 806,819 460,701 30,657 9,328 16,931 145,184 113,354 30,665
400,830 294,341 37,822
476,277 323,881 38,423
351,614 246,732 20,749 2,928 27,241 53,963
53,668 15,000
33,494 56,385 24,094
443,651 317,348 14,819 2,658 5,765 37,178 25,854 40,029
466,483 336,784 15,355 9,075 35,733 40,507 29,029
567,245 440,099 19,085 71 15,903 38,358 25,854 27,875
Source: Various issues of Area and Crop Production Surveys, Central Statistical Authority and Consultant's calculation.
18
Here again the fitted regression line explained about 68% of the variation, with a correlation coefficient of about 0.83. Although both equations adequately explain the variation observed in the market supply of these crops over the period under consideration, they are seldom used for a long-term forecast. Because factors within the market environment do not remain stationery over a long period of time or do not continue influencing market in the same manner and magnitude as in the past. 3.5 Manufactured Products Market in the Region
In Amhara National Regional State there are about 267,700 manufacturing establishments ranging from cottage/handicraft to large scale, the majority being cottage/handicraft. The establishments cater manufactured products using indigenous and modern manufacturing technologies both for the domestic and export markets. The distribution of these establishments by major industrial groups is presented in Table 7. There are no manufacturing establishments belonging to the industrial groups such as manufacturing of wearing apparel, chemical and chemical products and rubber and plastic products in the medium and large scale category operating in the Region. About 27% of the total cottage/handicraft, 24% of small scale manufacturing and only 8% of the total medium and large scale manufacturing establishments are located in the Region, while in terms of population size the Region stands in second position, representing 25% of the total population of the country with its large untapped resource potential. Despite this comparative advantage, the Region appears to depend, for its basic need of manufactured products, on supply coming from other regions of the country and to a large extent on import as is the case for the rest of the country.
The major products produced by the existing large and medium manufacturing establishments of the Region include meat, flour, edible oil, biscuits & bread, beer, mineral water, textiles, and semi processed hides and skins. Information on the annual production volume of these products or the Region's share of these products in the total production of the country is not readily available.
19
Amhara National Regional State (ANRS) Table 7: Number of Industrial Establishments in Amhara Region
a) Cottage/Handicraft Manufacturing Establishments, 2001/02 National Industrial Group Total Manufacture of food products and beverages 524,172 Manufacture of tobacco products 967 Manufacture of textiles 221,847 Manufacture of wearing apparel, dressing and dyeing of fur 24,137 Tanning and dressing of leather, manufacturing of luggage, handbags saddlery etc. 12,025 Manufacture of wood and of products of wood and cork 60,461 Publishing, printing and reproduction of recorded media 197 Manufacture of chemicals and chemical products 1,117 Manufacture of other non-metallic mineral products 92,402 Manufacture of fabricated metal products, except machinery & equipment 20,788 Manufacture of furniture 16,562 Grand Total 974,675 b) Small Scale Manufacturing Establishments, 2001/02 National Total 693 15,354 23 962 167 228 106 1,306 30 1,099 19,994 Amhara Region 169 3,961 2 117 19 84 18 165 1 252 4,788 Percent Share 24.4 25.8 8.7 12.2 11.4 36.8 17.0 12.6 3.3 22.9 23.9 Amhara Region 121,804 89 82,572 9,619 5,792 10,441 183 23,935 6,007 2,388 262,830 Percent Share 23.2 9.2 37.2 39.9 48.2 17.3 0.0 16.4 25.9 28.9 14.4 27.0
Industrial Group Manufacture of food products except grain mill services Grain mill services Manufacture of textiles Manufacture of wearing apparel, dressing and dyeing of fur Manufacture of wood and of products of wood and cork Publishing, printing and reproduction of recorded media Manufacture of other non-metallic mineral products Manufacture of fabricated metal products, except machinery & equipment Manufacture of machinery & equipment Manufacture of furniture Grand Total
c) Large and Medium Scale Manufacturing Establishments, 2002/03 National Total 288 38 56 17 73 115 10 73 158 9654 Amhara Region 27 5 6 1 2 14 1 5 17 78 Percent Share 9.4 13.2 10.7 5.9 2.7 12.2 10.0 6.9 10.8 8.1
Industrial Group Manufacture of food products & beverages Manufacture of Textiles Tanning and dressing of leather, manufacture of footwear, luggage & handbags Manufacturing of wood and of products of wood & cork Manufacture of paper, paper products and printing Manufacture of other non-metallic material products Manufacture of basic iron and steel Manufacture of fabricated metal product, except machinery & equipment Manufacture of furniture Grand Total
Source: Cottage/Handicraft, Small and Medium & Large Scale Manufacturing Survey, CSA.
However, the contribution of the industrial establishments in terms of gross value of production and value added could be easily ascertained from the annual survey reports of
4
Figure includes establishments existing in other regions of the country but not in Amhara Region. Development Studies Associates (DSA) & Shawel Consult International (SCI)
20
the Central Statistical Authority. The reports include detailed breakdown by industrial group for the cottage/handicraft and small scale manufacturing establishments, while for the large and medium ones gross value of production and value added are presented in aggregate. These are summarized in Table 8. The share of Amhara Region in total gross value of production and value added of the country comprising all categories of manufacturing industries stood at only 9% and 8% respectively. However, its share in individual category, in particular in the case of cottage/handicraft and small scale manufacturing industries, has been much higher, each commanding a share of 22% and 34% in gross value of production respectively. Its position in terms of value added in those categories of industries has been also better than the aggregate.
Table 8: Gross Value of Production and Value Added by Industrial Group in Amhara Region, 2001/02 (000
Birr)
a) Cottage/Handicraft Manufacturing Industries Gross Value of Production Industrial Group Manufacture of food products and beverages Manufacture of tobacco products Manufacture of textiles Manufacture of wearing apparel, dressing and dyeing of fur Tanning and dressing of leather Manufacture of wood and of products of wood and cork Publishing, printing and reproduction of recorded media Manufacture of chemicals and chemical products Manufacture of other non-metallic mineral products Manufacture of fabricated metal products, except machinery & equipment Manufacture of furniture Total National 1,303,824 1,554 387,301 99,142 27,374 43,603 1,329 4,751 65,679 58,382 113,190 2,106,129 Value Added National 357,494 606 154,771 49,635 11,470 23,569 966 2,273 46,121 27,499 60,550 734,954 % Share 20.25 1.74 26.16 29.27 47.07 10.21 23.41 15.86 35.88 7.80 21.51
Amhara
264,064 27 101,335 29,020 12,884 4,453
Amhara
67,276 14 41,158 14,659 5,625 2,366
% Share
18.82 2.31 26.59 29.53 49.04 10.04 12.10 16.17 40.54 6.10 20.91
1,112 10,417 20,949 8,824 453,085
275 7,459 11,147 3,694 153,673
21

Table 8 continued. b) Small Scale Manufacturing Industries Gross Value of Production Industrial Group Manufacture of food products except grain mill services Grain mill service Manufacture of textiles Manufactuire of wearing apparel, dressing and dyeing of fur Manufacture of luggage, handbags and footwear Manufacture of wood and of products of wood and cork Manufacture of paper and paper products Publishing, printing and reproduction of recorded media Manufacture of chemicals and chemical products Manufacture of other non-mettalic mineral products Manufacture of fabricated metal products, except machinery & equipment Manufacture of machinery and equipment Manufacture of parts and accessories for motor vehicles and their engines Manufacture of furniture Total National 73,499 486,710 2,273 16,620 363 4,953 1302 12,912 522 9,482 53,826 924 213 45,661 709,260 10,871,75 8 13,687,14 7 Value Added National 21,400 262,559 1,079 8,791 140 2,203 1,057 5,976 268 3,943 31,223 461 118 19,749 358,967 2,838,62 9 3,932,55 0 % Share 34.45 38.53 4.27 8.78
Amhara
25,324 187,543 97 1,460
Amhara
3,372 37,314 45 898
% Share
15.76 14.21 4.17 10.21
796
16.07
197
8.94
1,876
14.53
648
10.84
2912 8,935 27
30.71 16.60 2.92
702 2,220 6
17.80 7.11 1.30
9,738 238,708
21.33 33.66
3,943 49,345
19.97 13.75
c) Large & Medium Manufacturing Industries, (2003/04) Grand Total
566,870 1,258,66 3
5.21 9.2
118,632 321,650
4.18 8.18
It appears difficult to establish how much of these are consumed within the Region and how much is distributed to the rest of the country or exported or how much the region acquired from the rest of the country or import. The only documents one can comfortably look for to derive statistics of the above types are those issued annually by the Central Statistical Authority and/or Ethiopian Customs Authority. However, these documents usually provide statistics at country level. It requires developing certain but realistic assumptions to provide a breakdown at Regional level. Thus the value of import given at country level in Table 9 has been disaggregated to establish the share of the Region using the following parameters and assumptions: The ratio of the Region's agricultural production to total production of the country for agricultural capital goods imports. The ratio of the Region's gross production value of manufacturing establishments of all categories to total gross production value of the country for industrial capital goods and raw material imports.
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The ratio of the Region's population size to total population size of the country for transport related capital goods, durable and non-durable consumer goods, fuel, semi-finished and miscellaneous goods import.
Table 9: Import by Broad Commodity Group, 1997 - 2002, Country Level (000 Birr)
Commodity Capital Goods (Agricultural) Capital Goods (Industrial) Capital Goods (Transport) Consumer Goods (Durable) Consumer Goods (Non-durable) Fuel Raw Material Semi-finished Goods Miscellaneous Total 1997 79,938 2,010,719 1,174,305 815,509 978,932 764,562 165,982 1,449,088 51,543 7,490,579 1998 91,047 2,254,126 730,589 963,003 1,680,539 2,561,564 180,897 1,830,747 92,829 10,385,340 1999 84,605 2,734,284 1,367,352 1,242,319 2,297,921 1,228,974 198,159 1,709,181 208,944 11,071,74 0 2000 98,713 2,610,460 1,303,217 1,224,525 2,331,581 2,535,164 190,946 2,127,909 303,042 12,725,55 7 2001 59,040 2,801,660 1,315,897 1,453,925 3,858,749 2,683,810 255,852 2,534,770 380,080 15,343,78 4 2002 53,944 2,845,051 1,197,774 1,411,698 3,241,196 1,694,453 198,835 2,325,969 559,623 13,528,543 Six Years average 77,881 2,542,717 1,181,522 1,185,163 2,398,153 1,911,421 198,445 1,996,277 266,010 11,757,59 0 % Share 0.66 21.63 10.05 10.08 20.40 16.26 1.69 16.98 2.26 100.00
Source: Export Promotion Department, MoTI & consultants calculation.
Thus the import share of the Region is assumed to be proportional to these ratios. The above ratios are established based on the values of the indicators estimated for the year 2001/02. Accordingly the first ratio turned out to be 0.30, the second one being 0.13 and third one 0.25. Thus the import share of the Region is derived using these ratios and the country's import bill for the indicated commodities and the result is presented in Table 10. Imported commodities worth on the average about Birr 2.6 billion were believed to be consumed in Amhara Region annually over the period considered under the above set of assumptions. Similarly non-durable consumer goods held a share of about 23%, followed by semi-finished consumer goods. Fuel consumption appeared to be highly exaggerated. The ratio applied for fuel does not seem appropriate for obvious reason. It should have taken into account factors such as number of vehicles on the road, concentration of fuel driven machine and intensity of transport operations across the Region. A proxy estimate using these indicators was not possible due to lack of reliable information on the indicators.
Table 10: Estimated Import Share of Amhara Region, 1997 - 2002, (000 Birr) Development Studies Associates (DSA) & Shawel Consult International (SCI)
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Commodity Capital Goods (Agricultural) Capital Goods (Industrial) Capital Goods (Transport) Consumer Goods (Durable) Consumer Goods (Non-durable) Fuel Raw Material Semi-finished Goods Miscellaneous Total
1997 23,981 261,393 293,576 203,877 244,733 191,141 21,578 362,272 12,886 1,615,437
1998 27,314 293,036 182,647 240,751 420,135 640,391 23,517 457,687 23,207 2,308,68 5
1999 25,382 355,457 341,838 310,580 574,480 307,243 25,761 427,295 52,236 2,420,27 2
2000 29,614 339,360 325,804 306,131 582,895 633,791 24,823 531,977 75,761 2,850,156
2001 17,712 364,216 328,974 363,481 964,687 670,953 33,261 633,692 95,020 3,471,99 6
2002 16,183 369,857 299,443 352,924 810,299 423,613 25,848 581,492 139,906 3,019,567
Six Years average 23,364 330,553 295,381 296,291 599,538 477,855 25,798 499,069 66,503 2,614,35 2
% Share 0.89 12.64 11.30 11.33 22.93 18.28 0.99 19.09 2.54 100.00
The type of manufactured products produced in the Region and in the rest of the country usually determines the market structure being operational at regional and country level. Most of the products that the domestic industries produce belong to the category of convenient and shopping goods. These groups of products are usually channeled to the final consumer through a system that reduces the search time of the consumer. Accordingly manufacturers tend to position their products to majority of consumers through the most accessible way available in the system. The existing distribution practice of a manufacturer in the Region as well as in the rest of the country consisted of selling his products through a wholesaler and/or through retail outlets that he opens at convenient locations to retailers and/or final consumers. In the case of exportable products, the export activity is handled by one of the departments of the manufacturer and/or the activity is handled through a subcontracting arrangement with prominent exporters. In summary the schematic diagram presented in Figure 6 adequately depicts the market structure for manufactured products in the Region.
24
Amhara National Regional State (ANRS) Figure 6: Market Structure for Manufactured Products in Amhara Region Manufacturer Export Market
Manufacturer's Sales Outlet
Wholesaler Exporter Retailer
Consumer
3.6
Trade Discipline in the Region
Several factors are expected to contribute to market stagnation. Supply shortages of marketable commodities and services or demand shortfalls of the same are believed to be the major factors that cause market instability. These two factors bring structural changes in the existing marketing channel and clear and observable changes in other marketing mix, mainly in the prices of commodities and services offered in the market. They also invite illegal trade and malpractices to mushroom, thus bringing disruption in the existing fair trade scenarios of the market. In general individual trade operators and/or producers who are knowingly orchestrating or being engaged in unfair trade practices such as deliberately adulterating commodities with foreign matters, messing up with weighing scales etc. contribute to emergence of unfair trade scenarios. Their motive is to earn as much profit as possible at the risk of final consumers.
According to the micro and small enterprise agency of the Region, commodities like teff, lentils, sesame seeds, rape seeds, fenugreek etc. have high probability of being adulterated with foreign matters. Samples of the foreign matters are displayed at the office of the agency. They appear to have the same grain size and colour as the crop being adulterated. It is hardly difficult for a consumer to differentiate them and
25
afterwards to separate them from the genuine commodity. The Agency reported that there were instances where up to 25% of the contents of a quintal comprised foreign matters. There was also a case when a consignment destined to Addis Ababa was returned after it was identified as having foreign matters. This is indeed a serious problem for the Region. Once this kind of malpractice is sustained, unnoticed, the Region may eventually lose potential markets for its products and it certainly becomes very difficult to regain them afterwards. The problem was reported to exist in the North Western part of the Region, which is potentially rich for oilseeds production. Producers and traders operating in this part of the Region and those individuals who assist in the adulteration process need to be transformed first through education before taking any legal action. The extension workers of the Bureau of Agriculture are the proper people to bring this issue to the attention of the producers and traders.
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4. 4.1
EXPORT PROSPECTS AND POTENTIAL IN AMHARA REGION General
The country's export to the world market mainly comprised primary agricultural products. The average export earning of the country over the past six years stood at Birr 4,229 million, of which about 72% has been accounted to earnings from export of agricultural products, excluding hides and skins, which are exported in semi processed or finished form. Coffee in general is the major export commodity of the country. The second most important export commodity of the country is hides and skins, while chat took a third position being followed by oilseeds. The contribution of the Region to the export earning of the country from export of commodities such as hides and skins, oilseeds, pulses, spices, live animals and natural gum is believed to be relatively large as the Region has a good comparative resource advantage with respect to these commodities. The aggregate export value of these products in 2004 reached about Birr 2,115 million, representing about 40% of total export revenue. Details are presented in Table 11.
The share of export of manufactured products in the total export earning of the country appears to be quite small. It basically comprised semi-processed products, the major one being hides and skins. The Region has also some shares in the export of manufactured products. Products such as hides and skins, meat and meat products and textiles are among the major export of the Region, though difficult to provide an estimate.
Earnings from agricultural exports have been noted to fluctuate from year to year, mainly due to falling agricultural commodity prices. This has been noted in several cases and occasions to be a common problem of all exporting countries that depend on primary agricultural products as their major source of foreign exchange earning. As an illustration see and compare Figure 7 and 8. Although the country's export volume of coffee and oilseeds showed continuous sharp rise during the last six years, with the exception of few
27
instances, the corresponding export value did not increase by as much. This is simply a reflection of unstable agricultural commodity prices.
Table 11: Ethiopia's Export by Selected Commodities, 1999 - 2004 ('000 Birr)
Commodity Coffee Hides and Skins Oil Seeds Pulses Chat Spices Fruits Vegetables Flowers Live Animals Cereals Animal fodder Bees wax Beverages Cotton Gold Hop Meat & meat products Molasses Natural Gum Sugar Tantalum Tea Textile, Clothing & Apparel Others Grand Total 1999 2,131,804 241,068 249,154 115,594 518,072 20,775 9,797 21,541 897 8,968 18,142 1,858 7,249 792 39,001 21,872 596 30,770 1,034 18,416 2,737 53,299 433 17,601 21,509 3,552,980 2000 2,098,12 3 390,575 235,778 84,388 566,525 26,740 8,806 17,379 3,132 10,958 28,339 1,561 7,352 1,182 47,407 227,275 2,735 19,419 1,618 24,223 84,633 32,164 1,219 21,647 15,745 3,958,92 3 2001 1,226,51 8 630,786 317,220 189,599 458,230 39,000 12,135 36,984 1,227 4,335 10,185 4,527 4,750 1,539 54,813 294,556 2,374 12,972 4,915 23,910 7,882 85,794 714 35,137 176,557 3,636,66 0 2002 1,375,967 525,390 335,762 311,713 364,057 36,040 22,708 45,224 167 4,752 122,626 5,345 5,360 1,732 44,114 325,140 1,787 14,638 4,478 30,052 227,331 41,886 4,190 38,620 30,558 3,919,638 2003 1,578,63 9 486,414 522,307 174,531 624,200 52,658 13,998 40,885 406 9,399 98,867 2,578 8,052 3,004 113,338 118,522 2,302 54,977 1 35,618 133,983 26,229 17,796 63,322 776,349 4,958,37 3 2004 2,109,744 589,997 736,621 305,656 53,400 73,194 20,758 72,255 3,925 31,527 103,463 2,384 8,366 3,445 83,576 686,004 1,674 62,348 9,769 34,754 0 2,794 17,368 70,594 263,839 5,347,456 Six Years Average 1,753,466 477,372 399,474 196,913 430,747 41,401 14,700 39,045 1,626 11,657 63,604 3,042 6,855 1,949 63,708 278,895 1,911 32,521 3,636 27,829 76,094 40,361 6,953 41,153 214,093 4,229,005 % Share 41.46 11.29 9.45 4.66 10.19 0.98 0.35 0.92 0.04 0.28 1.50 0.07 0.16 0.05 1.51 6.59 0.05 0.77 0.09 0.66 1.80 0.95 0.16 0.97 5.06 100.00
Source: Ethiopian Customs Authority & Consultants calculation.

Figure 7: Export value of Coffee and Oilseeds
2,500,000 2,000,000 Value in million 1,500,000 1,000,000 500,000 0 1999 2000 2001 2002 Year 2003 2004
Coffee Export Oilseeds Export
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Amhara National Regional State (ANRS) Figure 8: Volume of Export of Coffee and Oilseeds
180,000 160,000 140,000 120,000 Volume in tons 100,000 80,000 60,000 40,000 20,000 0 1999 2000 2001 Year 2002 2003 2004 Oilseeds Export Coffee Export
4.2 4.2.1
Export of Major Agricultural and Manufactured Products Coffee Export
Agricultural products exports represented the lion's share of the country's foreign exchange earning as noted above, coffee being the major export commodity. Of the total export of the country about 41% has been accounted to earnings from coffee export. Export of coffee has been increasing during the past four years. Earning from export of coffee increased from Birr 1,222.9 million in 2001 to 2,103.8 million in 2004, corresponding to an average annual growth rate of 19.8%. A sharp rise was noted in volume terms; it increased from 84,644 tons to 156,416 tons during same period, with an average annual growth rate of 22.7%. Ethiopia exports coffee to several countries in the world, including to countries in Africa, the Middle East, Asia, EU and USA. Germany, which is the largest market in EU member countries, has been the major importer of Ethiopian coffee. For instance, Germany's import of Ethiopian coffee ranged from Birr 385.1 million to Birr 616.9 million during the period 2002 and 2004 respectively. The highest export to Germany was attained in 2002, reaching a level of Birr 738.2 million. The next major buyers of Ethiopian coffee include Japan, Saudi Arabia, Belgium, USA and Italy in that order of importance. For details see Table 12.
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The share of the Region in coffee export appears to be negligible. The production of coffee at a commercial scale in Amhara Region has been noted to be comparatively small and will take sometime to be able to inject gainful impact on the economy of the Region. According to the Bureau of Agriculture, land suitable for coffee growing has been estimated at about 1.6 million hectares, of which only about 1% has been cultivated so far. The estimated production in 2001/02 did not exceed 1% of the total production of the country. Although no reliable source was available that indicates the contribution of the Region to coffee export earning of the country, one could easily deduce from the Region's estimated production and land utilized for coffee production how small it would be. However, there is much potential for coffee development in the Region.
Table 12: Ethiopia's Export of Coffee by Country of Destination, 1999 - 2004

1999 Importing Country Australia Belgium Bulgaria Canada China Denmark Djibouti Egypt Finland France Germany Great Britain Greece Israel Italy Japan Jordan Korea, Republic of Netherlands Norway Poland Romania Russia Federation Saudi Arabia South Africa Spain Swaziland Sweden Quantity 468 5,950 18 1,241 15 468 0 72 547 8,527 30,485 744 339 1,098 5,066 24,577 540 201 1,044 54 1,710 0 18 17,617 108 516 0 684 Value 8,582 105,255 280 25,613 187 7,771 2 1,177 13,327 154,507 605,460 12,693 5,143 16,056 116,755 443,210 8,526 3,794 16,470 1,455 26,168 0 286 381,272 2,082 8,913 0 13,398 Quantity 449 7,146 18 810 18 468 0 108 190 7,326 41,119 740 378 594 5,108 26,377 468 221 3,292 126 1,120 198 54 14,619 144 1,260 0 414 2000 Value 7,529 115,099 247 14,638 279 7,422 0 1,900 4,121 111,542 738,180 12,757 5,673 8,889 111,379 445,242 8,302 3,761 46,102 2,593 17,893 2,694 742 286,794 2,303 14,228 0 8,619 (tons & '000 Birr) 2001 Quantity Value 479 6,491 2,919 37,613 36 519 832 12,758 18 164 37 354 9,416 129,263 72 855 126 2,165 7,023 89,364 10,533 155,238 665 9,841 647 10,305 630 5,977 3,386 56,228 22,221 282,310 324 3,545 212 2,621 248 3,865 144 2,779 306 3,394 234 2,508 54 560 17,527 293,292 90 1,093 252 3,195 546 9,281 252 4,814
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Switzerland Taiwan province of china United Arab Emirates United States Yemen Others Total Table 12 (contd.)
432 230 486 4,790 432 18 108,493
9,097 3,574 8,192 111,996 10,823 281 2,122,346
198 287 41 4,507 345 36 118,178
3,267 4,317 600 91,832 7,625 579 2,087,149
686 154 323 3,632 515 104 84,644
10,582 1,828 4,123 66,022 8,559 1,359 1,222,864
2002 Importing Country Australia Belgium Bulgaria Canada China Denmark Djibouti Egypt Finland France Germany Great Britain Greece Israel Italy Japan Jordan Korea, Republic of Netherlands Norawy Poland Romania Russia Federation Saudi Arabia South Africa Spain Swaziland Sweden Switzerland Taiwan province of china United Arab Emirates United States Yemen Others Total Quantity 515 6,936 50 926 72 199 53 271 486 8,423 32,551 953 468 1,026 6,438 30,815 378 230 736 270 216 252 180 17,894 135 396 90 306 2,442 174 758 3,749 654 462 119,504 Value 5,857 72,022 523 11,184 800 1,990 672 2,389 7,509 84,447 385,104 10,681 5,712 9,110 97,119 295,321 3,514 2,426 8,146 4,103 2,061 2,018 1,571 233,660 1,190 4,297 1,383 5,458 29,555 1,594 7,182 63,307 8,034 6,029 1,375,967 Quantity 836 8,457 36 1,112 89 397 284 125 234 6,991 40,034 1,149 371 794 6,324 31,392 162 460 1,963 846 1,530 234 288 18,561 81 481 90 1,337 3,058 277 662 5,390 651 1,536 136,231
2003 Value 9,097 85,219 490 13,459 865 3,681 2,782 1,404 3,178 67,652 454,609 15,274 3,658 6,961 92,538 335,007 1,414 4,651 17,756 12,220 13,566 1,917 2,694 236,554 769 4,836 802 16,230 31,060 2,709 7,600 86,901 8,069 18,056 1,563,677 Quantity 665 11,017 54 1,416 161 144 289 145 252 7,133 47,429 2,369 317 456 7,088 37,336 144 375 730 527 414 54 1,080 20,262 93 504 90 2,523 3,221 290 852 7,046 409 1,533 156,416
2004 Value 8,802 141,291 1,118 18,450 1,901 2,080 6,775 2,293 3,483 87,926 616,913 36,597 3,692 6,235 112,281 473,989 1,791 4,618 10,949 7,841 4,306 1,458 12,618 294,315 1,024 6,812 979 32,701 41,272 3,472 9,873 119,991 6,628 19,326 2,103,800
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4.2.2 Hides and Skins

The second largest export of the country is hides and skins. It is exported in the majority of cases after being processed to a certain stage. It includes pickled sheep and goat skins, wet blue and crust hides and skins, and a small quantity of finished leather. The country exported hides and skins worth on the average Birr 477.4 million during the past six years (see Table 13), of which export of sheep skins took a share of about 58%, while goat skins commanding 39%. Amhara Region is the second largest in terms of livestock size in the country, accounting 25%, 35% and 29% of the cattle, sheep and goat population of the country respectively. It is expected that the Region would contribute by as much to the foreign exchange earning of the country from export of hides and skin.
Table 13: Ethiopia's Export of Hides and Skins, 1999 2004
(Kg and Birr) 2002 Quantity Value 4,502 2,734 4,097 162 11,495 79,760 251,278 187,229 7,122 525,390
Type of Hides & Skins Hides (Bovine) Sheep or lamb skins Goat or kid skins Other hides/skins Total Table 13 (contd.) Type of Hides & Skins Hides (Bovine) Sheep or lamb skins Goat or kid skins Other hides/skins Total
1999 Quantity Value 1,440 3,137 1,372 283 6,232 10,296 175,419 30,568 24,786 241,068
2000 Quantity Value 3,197 4,770 2,927 456 11,351 32,535 260,41 3 53,797 43,829 390,57 5
2001 Quantity Value 143,76 3,051 9 317,11 4,355 9 159,05 3,782 0 279 10,848 630,78 11,468 6
2003 Quantity Value 5,456 52,873 3,411 3,169 23 12,060 301,640 129,997 1,904 486,414
2004 Quantity Value 7,231 68,649 352,36 4,153 7 163,13 4,012 0 134 5,851 589,99 15,529 7
% change 2004/2003 Quantity Value 32.5 29.8 21.8 26.6 482.6 28.8 16.8 25.5 207.3 21.3
Average Export Quantity Value 4,146 64,647

3,760 3,227 223 11,356 276,373 120,629 15,723 477,372
Source: Ethiopian Customs Authority & Consultants calculation. Like coffee Ethiopia's export of hides and skins are destined to different countries around the globe. Italy, which is known to be one of the best in leather products in EU countries, has been the major and long standing buyer of Ethiopian hides and skins. Her import
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from Ethiopia, for example, was worth in the range of Birr 102.3 million and 283.7 over the past six years, though transaction fluctuation has been noted during the period mainly because of a falling or rising commodity prices. The shaded rows in Table 14 show countries importing relatively large volume of hides and skins from the country.
Table 14: Ethiopia's Export of Hides & Skins by Country of Destination, 1999 - 2004
(tons & '000 Birr) 1999 Importing Country China Djibouti France Germany Great Britania Greece Hong Kong India Indonesia Italy Japan Malaysia Netherlands Pakistan Romania Spain Switzerland Thailand United States Others Total Quantity 36 0 16 44 769 72 463 197 420 3,781 52 203 29 0 12 34 0 62 0 45 6,232 Value 3,960 0 1,317 3,784 56,546 818 2,231 7,929 26,320 102,337 4,147 14,249 1,595 0 2,452 3,120 0 6,177 0 4,086 241,068 2000 Quantity 41 19 1 84 794 189 742 1,852 596 5,858 132 318 43 0 30 335 0 77 0 240 11,351 Value 3,392 797 433 8,026 61,722 1,826 4,623 58,706 42,994 130,632 8,678 23,794 2,384 0 6,034 21,690 0 4,569 12 10,261 390,575 2001 Quantity 171 872 2 113 871 200 632 1,682 285 5,552 103 170 93 9 32 246 66 108 20 240 11,468 Value 18,559 37,274 942 11,205 95,519 4,519 8,461 62,286 23,284 283,746 9,016 15,599 1,240 492 10,795 19,383 4,740 12,312 1,000 10,412 630,786 Quantity 376 39 19 11 1,167 189 1,240 740 240 6,459 70 243 57 0 40 229 30 89 21 236 11,495 2002 Value 30,384 3,302 3,974 3,503 112,287 2,051 9,603 36,995 15,734 230,687 9,106 21,482 1,113 36 8,105 13,208 2,693 8,422 834 11,872 525,390
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Table 14 (contd.) 2003 Importing Country China Djibouti France Germany Great Britania Greece Hong Kong India Indonesia Italy Japan Malaysia Netherlands Pakistan Romania Spain Switzerland Thailand United States Others Total Quantity 1,563 14 13 76 961 249 1,704 610 238 5,268 158 276 62 17 37 77 160 108 56 414 12,060 Value 37,295 1,244 2,741 7,710 87,265 2,262 12,631 39,212 16,283 194,195 16,864 23,038 447 1,422 9,210 5,276 2,060 10,005 3,335 13,919 486,414 2004 Quantity 3,542 18 21 24 980 270 2,457 767 120 5,406 118 337 45 227 56 86 137 118 30 771 15,529 Value 90,723 592 4,611 1,750 82,626 2,902 21,402 51,675 12,214 190,636 9,185 27,050 849 9,718 13,120 7,081 5,320 15,002 8,319 35,221 589,997 Average Export Quantity 955 160 12 59 924 195 1,206 975 317 5,387 105 258 55 42 35 168 66 94 21 324 11,356 Value 30,719 7,201 2,336 5,996 82,661 2,397 9,825 42,800 22,805 188,706 9,499 20,869 1,271 1,945 8,286 11,626 2,469 9,415 2,250 14,295 477,372
4.2.3
Export of Fruits
The country exports different types of fruits to the world market. The major types being exported and worth in millions include bananas, pineapples, guavas, oranges and mandarins. Export of lemons and papayas are also found to be important and worth in hundred thousands. The combined export value of guavas, orange and mandarins in 2004 was about Birr 14.5 million, accounting 70% of the countrys export of fruits in the same year. The earning from export of these three important fruits reached its highest peak in 2002, amounting to Birr 19.1 million. The export performance remained below this level until last year (2004). A fourth important export fruit of the country catching up with those mentioned above is banana. Export of banana grew at an average annual growth rate of about 36% and 48% both in volume and value respectively in the past five years, with . no fluctuation in the consecutive years. For details see Table 15
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Amhara National Regional State (ANRS) Table 15: Ethiopia's Export of Fruits, 2000 2004
(Kg and Birr) 2000 Type of Fruit Exported Bananas, including plantains, fresh or dried Pineapples, fresh or dried Avocados, fresh or dried Guavas, mangoes and mangosteens, fresh or dried Oranges, fresh or dried Mandarins, clementines, wilkingsetc, fresh or dried Lemons and limes, fresh or dried Citrus fruit, fresh or dried, nes Melons(including watermelons) Papaws (papayas), fresh Peaches, including nectarines, fresh Fruit and nuts, provisionally preserved Other fruits Total Table 15 (contd.) 2003 Type of Fruit Exported Bananas, including plantains, fresh or dried Pineapples, fresh or dried Avocados, fresh or dried Guavas, mangoes and mangosteens, fresh or dried Oranges, fresh or dried Mandarins, Clementine, Wilkinsetc, fresh or dried Lemons and limes, fresh or dried Citrus fruit, fresh or dried, nes Melons(including watermelons) Papaws (papayas), fresh Peaches, including nectarines, fresh Fruit and nuts, provisionally preserved Other fruits Total Quantity 1,265,459 15,508 1,920 1,091,726 2,044,063 170,060 465,801 2,425 25,484 202,648 21,675 63,459 43,958 5,414,186 Value 2,830,207 148,372 2,988 2,457,663 6,150,209 362,752 768,908 5,087 86,874 350,813 30,575 96,629 706,889 13,997,966 Quantity 2,284,772 186,705 720 1,359,490 3,489,104 345,200 496,369 9,320 28,620 251,475 38,649 23,910 8,908 8,523,242 2004 Value 3,955,540 794,392 1,308 2,859,122 10,915,858 755,616 706,867 13,809 41,938 446,532 59,014 139,603 68,641 20,758,238 Quantity 496,486 Value 821,757 20,091 834,602 3,348,744 151,122 3,429,457 20,116 1,836 168,249 8,821 107 1,070 8,805,972 Quantity 969,225 3,735 400 851,337 2,182,713 241,227 502,193 1,140 150,781 124,932 64,632 87,440 31,411 5,211,166 2001 Value 1,612,006 13,200 851 1,838,591 6,377,817 519,330 875,678 2,906 266,179 207,989 91,764 126,900 201,898 12,135,108 827,405 1,965,091 220,443 443,288 80 109,157 179,795 17,130 90,693 105,573 4,967,957 5,812,397 5,839,619 7,422,904 652,222 111 168,634 305,212 23,412 128,881 604,476 22,708,112 Quantity 1,000,038 9,264 2002 Value 1,698,072 52,172
7,935 437,539
1,212,709 73,245
282,262
7,052 690 102,335 6,265 80 705 2,627,303
Source: Ethiopian Customs Authority & Consultants calculation. Ethiopian fruits by and large are exported to few countries of the world, the major buyer being Djibouti. In the last five years Djibouti imported Ethiopian fruits worth an average of Birr 14.4 million per year, corresponding to about 92% of total export of fruits. The countrys long-standing buyers are Djibouti and Yemen. New buyers like the Sudan and Great Britain appear to show interest in the Ethiopian fruits. These countries increased their import in value in 2004 by about 1011% and 458% respectively compared to their import in 2003 (see Table 16).
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Although few EU member countries import Ethiopian fresh fruits, it is worth mentioning their importance as a market for fresh fruits. A market survey on fresh fruits and vegetables was conducted in 2005 by the Centre for the Promotion of Imports from Developing Countries (CBI). The survey result indicated that in 2003, total imports by EU member countries of fresh fruit amounted to about 17.1 billion, representing a total increase of 8 percent since 2001. In terms of volume, imports by EU member countries increased by 5 percent, reaching 22.2 million tones in 2003. Imports from outside the EU into the member states amounted to 7.1 billion / 9.7 million tones, representing an increase in both value and volume during the survey period. Germany, the UK and France are the leading EU importers of fresh fruit, while the leading suppliers are Spain, Italy, The Netherlands, Belgium and France. Bananas, apples, grapes and several citrus fruits are the most popular import products in the EU within the fresh fruit category. The survey result also pointed out that developing countries play a major role in the supply of papayas, tamarinds, lychees, bananas, guavas, mangoes, pineapples, dates, passion fruit and avocados to the EU market. In 2003, developing countries supplied at least half of total imports (in value) by EU member countries of these products. The leading developing countries exporting fresh fruit to the EU are South Africa and LatinAmerican countries like Costa Rica, Ecuador, Colombia, Chile, Argentina, Brazil and Panama. These Latin-American countries are mainly high in the list because of the substantial banana supplies. Other leading developing countries are Cte dIvoire, Turkey, Morocco and Cameroon.
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Amhara National Regional State (ANRS) Table 16: Export of Fruits by Country of Destination, 2000 2004
(kg & Birr) 2000 Importing Country Djibouti France Great Britain India Saudi Arabia Sudan United States Yemen Others Total Table 16 (contd.) 2004 Importing Country Djibouti France Great Britain India Saudi Arabia Sudan United States Yemen Others 9,320 120,000 2,850 39,480 2,620 13,809 218,192 5,026 200,182 7,906 +48.1 +210.7 +1264.4 +172.7 +206.0 -30.9 +1010.7 +58.1 +439.9 32,380 459,192 +499.6 +458.1 Quantity 8,310,592 Value 19,830,341 % change 2004/03 Volume +61.8 Value +58.8 31,850 12,957 2,627,303 3,059,473 39,463 8,805,972 1,040 21,960 200 5,211,166 2,992 176,846 1,536 12,135,108 2,000 4,943 7,704 50,616 2,695 3,136 66,000 126 4,967,957 5,776 35,779 363,519 2,894 22,708,112 Quantity 2,580,496 Value 5,702,093 Quantity 5,180,262 2001 Value 11,903,118 Quantity 4,894,920 1,080 2002 Value 22,290,122 10,023 Quantity 5,135,538 18,000 5,400 210,000 3,000 8,795 1,045 12,900 19,508 5,414,186 2003 Value 12,489,039 237,857 82,280 638,553 19,994 19,645 3,179 37,077 470,342 13,997,966
Total 8,517,242 20,734,647 +57.3 Source: Ethiopian Customs Authority & Consultants calculation.
The contribution of the Amhara Region to export of fruits has not been recorded. However, in view of its share in the total production of fruits in the country, its export volume does not appear to be much. For instance in 2002 the Region produced 18,353 quintals of fruits, while the country total was 2,038,462 quintals and total export was 49,679.6 quintals. The marketable volume was estimated to be 11,507 quintals; obviously 100% will not pass the rigorous quality and safety control procedures importing countries put as a requirement.
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4.2.4
Export of Vegetables
The countrys major exports of vegetables include potatoes, tomatoes and onions. The total foreign exchange generated through the export of vegetables hiked up from Birr 17.3 million in 2000 to Birr 72.1 million in 2004. The average annual growth rate reached about 43%, with a small drop in 2003 compared to earnings in 2001 and 2002. Export of vegetables like leeks, carrots, and lettuce/cabbage declined in 2004 compared to what was exported one year earlier and their contribution was not significant. They represented only 3% of the total export earning in 2004. The principal ones accounted about 57% of the total export. For detail see Table 17.
Table 17: Ethiopias Export of Vegetables, 2000 2004 (tons & 000 Birr)
Type of Vegetables Potatoes Tomatoes Onions/Shallots Garlic Leeks Carrots/turnips Cucumbers Beet root White/red cabbage Lettuce/cabbage Other vegetables Total 2000 Quantity Value 3,247 6,329 1,457 3,447 2,234 4,041 221 547 1 1 0 0 239 276 0 0 0 0 1 1 2,012 2,706 9,412 17,348 2001 Quantity 6,169 2,869 3,425 329 977 382 377 733 567 905 3,766 20,499 Value 14,043 7,160 6,691 905 1,270 589 373 989 770 1,338 9,468 43,596 2002 Quantity Value 5,735 10,994 3,121 7,571 4,451 8,551 126 364 1,136 1,482 398 548 560 602 794 1,054 541 720 800 1,175 4,820 12,167 22,484 45,229
Table 17 (contd.)
Type of Vegetables Potatoes Tomatoes Onions/Shallots Garlic Leeks Carrots/turnips Cucumbers Beet root White/red cabbage Lettuce/cabbage Other vegetables Total 2003 Quantity Value 6,071 11,735 3,310 8,096 4,277 8,346 155 382 1,199 1,671 402 586 443 469 841 1,319 532 725 1,197 1,899 2,030 5,721 20,457 40,950 2004 Quantity 8,198 5,209 5,608 505 944 376 440 901 640 608 8,623 32,052 Value 17,198 13,203 10,828 1,214 1,211 498 517 1,245 871 754 24,580 72,119
% change 2004/03
Quantity Value
+35.0 +57.4 +31.1 +225.7 -21.3 -6.5 -0.7 +7.1 +20.2 -49.2 +324.8 +56.7
+46.6 +63.1 +29.7 +218.2 -27.5 -15.0 +10.3 -5.7 +20.1 -60.3 +329.7 +76.1
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Source: Ethiopian Customs Authority & Consultants calculation. Djibouti, the countrys neighbor, has been the leading importer of Ethiopian vegetables over the period considered. India, the Netherlands, United States and Yemen, though not as important as Djibouti, also imported quite a good volume of vegetables from Ethiopia. CBIs market survey also estimated the imports of fresh vegetables by EU member countries and accordingly imports of fresh vegetables amounted to almost 9.2 billion / 10.4 million tons in 2003. Compared to 2001, this represented a total increase of 9 percent in terms of value and 6 percent in terms of volume. The leading EU importers of fresh vegetables are Germany, the UK, France and The Netherlands. Leading suppliers to the EU are, by far, Spain and The Netherlands, together accounting for 60 percent of total supplies in terms of value in 2003. Tomatoes, capsicum, lettuce and onions are the major fresh vegetable products imported by EU member countries. Whereas Latin-American countries dominate the extra-EU import of fruit, African countries are important extra-EU suppliers of vegetables in particular to France, the UK, The Netherlands and Italy. Nevertheless, vegetable imports are, notably more than fruit imports, dominated by intra-EU trade. The leading fresh vegetable exporter among the developing countries is Morocco, followed by Kenya, Turkey, Egypt and Peru.
Amhara Region is believed to be among the potential suppliers of vegetables in the country. In 2002 the Regions share in the total production of the country in some vegetables such as onions, potatoes and garlic were estimated at 47.8%, 36.1 and 42.5% respectively. The first two are the principal export vegetables of the country. The Region is thus expected to have a major share in the export of these vegetables. The major vegetable trade partners of the country are presented in Table 18.
Table 18:
Export of Vegetables by Country of Destination, 1999 - 2004 (tons & '000 Birr) 2000 Importing Country Algeria Czechoslovakia Djibouti 9,390 17,221 17,582 35,872 Quantity Value Quantity 2001 Value Quantity 200 63 18,548 2002 Value 562 191 34,654
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France Hungary India Morocco Netherlands Saudi Arabia South Africa Sudan Switzerland United Arab Emirates United States Yemen Others Total Table 18 (contd.) 2003 Importing Country Algeria Czechoslovakia Djibouti France Hungary India Morocco Netherlands Saudi Arabia South Africa Sudan Switzerland United Arab Emirates United States Yemen Others 0 14 543 150 3 116 1,750 484 132 304 232 80 626 242 63 107 186 331 102 19,033 266 36,641 Quantity Value 19 3 9,412 91 35 17,348
299 127 437
805 42 397 1,173 872 497 161 210 21 110 2,458 1,375 441 545 50 473 514 2,199 1,656 45,229
598 204 5 751 496 20,499
1,562 608 15 1,922 1,242 43,596
200 208 821 641 22,484
2004 Quantity 325 44 23,998 237 154 1,565 215 1,255 524 84 250 42 1,780 850 730 32,052 Value 690 112 48,381 540 338 4,265 482 2,744 1,173 181 664 99 8,190 2,043 2,217 72,119
Total 20,457 40,950 Source: Ethiopian Customs Authority & Consultants calculation.
4.2.5 Export of Pulses
There are six different types of pulses that the country exports to the world market. Horse beans and kidney beans are among the top two export crops which brought quite a substantial amount of foreign exchange to the country. The two together fetched export revenue worth Birr 259.8 million in 2004, accounting about 92% of the total revenue generated from export of pulses. In aggregate export of pulse showed a substantial increase in 2004 compared to 2003 both in volume and value (see Table 19).
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Amhara National Regional State (ANRS) Table 19: Ethiopia's Export of Pulses, 2000 - 2004 2000 Quantity Value 3,221 9,786 128 2,330 102 481 23,995 70,605 125 564 100 622 27,670 84,388 2001 Quantity Value 3,941 22,693 42 161 31,553 78,584 32,933 85,425 835 2,735 1 2 69,305 189,599 (tons and '000 Birr) 2002 Quantity Value 13,433 43,718 646 1,801 53,390 137,222 45,899 123,276 1,729 4,921 720 1,712 189 860 116,004 313,511
Type of Pulses Horse beans Peas Chickpeas Kidney beans Lentils Adzuki beans Soya beans Total Table 19 (contd.) Type of Pulses Horse beans Peas Chickpeas Kidney beans Lentils Haricot beans Soya beans Total
2002 Quantity Value 25,455 76,547 509 1,201 2,329 6,678 31,454 83,453 855 2,827 1,897 4,595 71 285 62,571 175,586
2003 Quantity Value 40,281 104,777 677 3,521 4,009 10,169 62,925 155,025 993 3,340 2,167 4,735 1 9 111,052 281,577
% change 2004/03 Quantity Value +58.2 +36.9 +33.0 +193.2 +72.1 +52.3 +100.1 +85.8 +16.0 +18.2 +14.2 +3.0 -98.5 -96.7 +77.5 +60.4
Ethiopian pulses are exported to different parts of the world. The major buyers are countries in Africa, EU and Asia. The average export to African countries in the past five years accounted about 28% and 27% of total export of pulses both in volume and value respectively (see table 20). Asia ranked second, while EU member countries stood third in terms of volume, but they paid better price and ranked first in terms of value. The Netherlands, Great Britain, Italy and Germany were the major buyers among the EU member countries. In the EU market for pulses developing countries play a significant role in the supply of peas and beans and sweet maize, supplying respectively 54 and 47 percent of total imports (in value) by EU member countries in 2003.
Similarly the Sudan, Zimbabwe, Morocco, Kenya and South Africa were important markets to be mentioned in Africa. For further reference on other specific countries importing Ethiopian pulses see Annex 1.
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Amhara National Regional State (ANRS) Table 20: Ethiopian Export of Pulses by Country of Destination, 2000 - 2004
2000 Importing Country Africa EU Member Countries Other European Countries USA & Canada Middle East Asia Others Total Table 20 (contd.). 2003 Importing Country Africa EU Member Countries Other European Countries USA & Canada Middle East Asia Others Total Quantity 27,801 13,770 281 921 9,415 9,756 627 62,571 Value 74,143 43,582 725 2,622 26,440 26,169 1,905 175,586 2004 Quantity 47,791 31,869 2,152 2,180 14,487 10,677 1,048 110,203 Value 115,684 87,323 4,937 5,053 38,279 25,740 2,680 279,696 Quantity 7,113 14,785 419 100 5,174 0 79 27,670 Value 21,876 44,460 1,188 280 16,362 0 221 84,388 2001 Quantity 9,400 16,770 3,806 2,814 10,552 25,091 872 69,305 Value 25,088 54,301 9,765 7,226 29,677 61,034 2,509 189,599 (tons & 000 Birr) 2002 Quantity Value 15,400 45,977 19,275 66,950 1,262 3,203 1,466 4,069 14,630 28,420 60,104 152,340 3,866 15,551 116,004 316,511
5 Years Average
Quantity Value
21,501 19,294 1,584 1,496 10,852 21,126 1,299

77,151
56,554 59,323 3,964 3,850 27,836 53,057 4,573

209,156
Amhara Region is expected to hold about 46% of total production of pulses in the country and its marketable volume was estimated around 19% of its production. The annual marketable supply from the Region would be sufficient enough to cover the whole annual export of the country. 4.2.6 Export of Spices
The types of spices the country offered to world market in the past five years are presented in Table 21. The major ones include pepper, cumin seed, ginger, saffron and turmeric. Export earning from spices ranged from Birr 26.7 million in 2000 to Birr 73.2 in 2004, showing a substantial improvement over the period considered. Export of ginger, saffron and turmeric showed remarkable improvement both in volume and value in 2004 compared to exports of the same in the preceding years. The unit prices of the major export spices appear to be highly favorable to suppliers.
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Amhara National Regional State (ANRS) Table 21: Ethiopia's Export of Spices, 2000 2004
2000 Quantity Value 162 5,547 9 227 13 135 1,060 11,384 1,405 8,390 30 173 135 787 13 2,827 95 26,740 2003 Value 16,608 1,389 3,801 5,728 14,109 688 3,012 21 7,301 52,658 2001 Quantity 228 7 12 880 2,136 13 389 3 170 3,839 Value 8,845 185 65 10,363 9,568 68 2,094 85 7,726 39,000 (tons & '000 Birr) 2002 Quantity Value 277 9,354 46 1,476 55 265 370 2,498 1,439 5,364 58 195 215 926 5 126 398 15,834 2,863 36,040 % change 2004/03 Quantity Value -62 -47 -71 -65 -94 -94 +18 +32 +79 +133 +401 +531 +28 +68 +250 +881 +122 +87 +46 +39
Type of Spices Pepper Cardamoms Coriander seed Cumin seed Ginger Saffron Turmeric/Curcuma Genus/Capsicum/pimento Other spices Total
Table 21 (contd.)
Type of Spices Pepper Cardamoms Coriander seed Cumin seed Ginger Saffron Turmeric/Curcuma Genus/Capsicum/pimento Other spices Total Quantity 552 72 1,040 1,146 4,241 221 985 2 531 8,789 2004 Quantity Value 209 8,794 21 488 59 240 1,356 7,583 7,603 32,876 1,107 4,341 1,259 5,049 7 206 1,181 13,617 12,802 73,194
The major buyers of Ethiopias spices are countries in Africa, the Middle East and EU, together accounting about 89% of the countrys total export of spices in terms of value. Information is hardly available on total production of spices in the country, though Amhara Region is reported to be one of the potential areas for spice production and undoubtedly its contribution to the countrys export earning from spice would not be underestimated.
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Amhara National Regional State (ANRS) Table 22: Ethiopia's Export of Spices by Country of Destination, 2000 - 2004 2000 Quantity Value 795 5,752 127 1,405 150 802 28 605 1,727 18,176 0 2,827 1 26,740 2001 Quantity Value 1,126 9,025 114 7,763 66 2,428 1 104 3,839 1,368 20,086 81 676 39,000 (tons & '000 Birr) 2002 Quantity Value 1,137 6,786 228 16,245 63 1,410 5 20 2,863 1,739 10,375 736 158 36,040
Importing Country
Africa EU Member Countries Other European Countries USA & Canada Middle East Asia Others Total Table 22 (contd.)
Importing Country
Africa EU Member Countries Other European Countries USA & Canada Middle East Asia Others Total
2003 Quantity Value 3,260 19,305 395 7,470 174 696 105 1,299 3,733 19,679 607 2,203 513 2,008 8,789 52,658
2004 Quantity Value 6,513 26,876 287 12,383 50 160 44 1,300 4,808 25,724 610 4,169 490 2,582 12,802 73,194
% change 2004/03 Quantity Value +100 +39 -27 +66 -71 -77 -58 0 +29 +31 +1 +89 -5 +29 +46 +39
Source: Ethiopian Customs Authority & Consultants calculation. 4.2.7 Export of Oilseeds
Sesame seed has remained to be the major oilseed of the country exported to world market. It generated a foreign exchange ranging from Birr 181.4 million in 2000 to Birr 543.3 million in the year 2004, growing annually at an average growth rate of 31.6% and representing about 72% of the total export earning of the country from oilseeds export in 2004. It remained dominant in the rest of the years as well. Amhara Region is the major producer of oilseeds in the country. For instance its share in 2002 in the countrys total production of sesame seed was estimated to be 33.6% and much more in some other oilseeds like rape seed and sunflower. Its share in the total export earning of the country from oilseeds certainly appears to be relatively substantial.
44
Amhara National Regional State (ANRS) Table 23: Ethiopia's Export of Oilseeds, 1999 - 2004
1999 Type of Oilseeds Ground nuts Rape seed Sesame seed Mustard seed Safflower seed Sunflower Linseed Cotton seed Palm nuts kernel Other oilseeds Total Table 23 (contd.) Type of Oilseeds Ground nuts Rape seed Sesame seed Mustard seed Safflower seed Sunflower Linseed Cotton seed Palm nuts kernel Other oilseeds Total 2002 Quantity Value 133 1,029 2 10 68,084 262,639 180 995 1 1 2 2 8 1,244 5,169 20,179 89,825 66,775 336,627 2003 Quantity Value 213 1,477 119 524 71,342 411,816 162 944 2 8 114 414 4 14 60 547 24,095 96,111 110,380 526,125 2004 Quantity Value 215 1,486 188 1,172 71,708 543,345 10 45 305 1,306 83 302 157 848 1,150 1,252 555 5,358 35,945 202,633 110,316 757,749 Quantity 4 28,277 160 Value 28 1 182,059 957 2000 Quantity 30 60 31,042 130 1 1 Value 359 304 181,389 733 5 2 (tons & '000 Birr) 2001 Quantity Value 65 399 19 52 42,890 207,215
13 5 3,063 29,303 75,357
51 22 2,483 107,536 317,757
11,138 39,578
66,109 249,154
11,252 42,516
52,984 235,776
The world price of oilseeds has been favorable to exporters. Unit prices have increased in 2004 compared to 2003 almost in all types of oilseeds. Compare the percent change in volume and value given in table 24. The change in the latter case has been noted to be much higher than the change observed in the former and attributed to changes in unit price.
45
Table 24: Ethiopia's Export of Oilseeds by Country of Destination, 2000 2004 2000 Quantity Value 7,994 47,065 3,129 21,061 153 850 9,030 42,456 20,580 116,517 1,608 7,699 22 129 42,516 235,778 2001 Quantity 7,156 4,522 2,312 21,568 29,898 6,648 3,254 75,357 Value 36,043 20,118 11,159 77,468 127,617 29,724 15,628 317,757 (tons & '000 Birr) 2002 Quantity Value 11,016 39,294 9,270 37,133 14,454 51,591 15,918 51,687 28,652 109,555 6,785 25,101 3,730 22,266 89,825 336,627
Importing Country
Table 24 (contd.) Importing Country

2003 Quantity 4,499 8,900 16,460 18,500 39,322 5,972 2,457 96,111
Value 23,207 47,730 95,318 82,658 231,935 32,526 12,750 526,125
2004 Quantity 5,455 10,480 13,626

27624.923
Value 37,662 85,902 112,922

135862.933
39,909 12,464 757 110,316
293,122 88,040 4,237 757,749
% change 2004/03 Quantity Value +21 +62 +18 +80 -17 +18 +49 +64 +1 +26 +109 +171 -69 -67 +15 +44
Source: Ethiopian Customs Authority & Consultants calculation. 4.2.8 Export of Cereals
The country earned a foreign exchange equivalent to Birr 103.1 million in 2004 from export of cereals. The export performance over the last five years has been characterized by a severe fluctuation. In 2001 export dropped by nearly 40% compared to value of export in 2000. After showing a substantial improvement in the following year, the pattern repeated in 2003 (see Table 25). This type of behavior is quite common in primary export commodities such as cereals because of a declining world price. Maize has remained to be the major export crop of the country among the cereal category.
46
Amhara National Regional State (ANRS) Table 25: Ethiopias Export of Cereals, 2000 2004
2000 Quantity Value 2 6 30 106 32 118 385 685 1,051 2,184 156 610 2,729 24,630 4,384 28,339 2001 Quantity 7 37 17 5,225 690 533 0 6,510 Value 23 114 47 6,959 1,230 1,813 1 10,186 (tons & 000 Birr) 2002 Quantity Value 99 131 104 371 19 62 14,077 17,038 1,312 1,813 889 2,816 16,238 100,395 32,738 122,626
Type of Cereals Wheat Barley Oats Maize Sorghum Millet Other cereals Total
Table 25 (contd.)
Type of Cereals Wheat Barley Oats Maize Sorghum Millet Other cereals Total 2003 Quantity Value 58 139 82 251 6 19 746 872 1,412 3,565 625 1,754 12,293 92,267 15,224 98,867 2004 Quantity Value 118 339 178 594 17 51 11,405 15,712 2,086 2,875 75 268 16,010 83,232 29,890 103,072
The major buyers of Ethiopian cereals over the last five years are countries in Africa and the Middle East. In 2004 their total purchase amounted to about Birr 90 million, representing 87% of the countrys earning from export of cereals. Africas share of the total stood at nearly 50%. The price of cereals, however, was not favorable to suppliers from Ethiopia. The percent change in volume given in Table 26 was alarmingly high compared to the change in value. Price dropped by nearly 48% in 2004 compared to 2003.
47
Amhara National Regional State (ANRS) Table 26: Ethiopias Export of Cereals by Country of Destination, 2000 2004 2000 Quantity 1,368 0 216 2,797 0 3 4,384 2003 Quantity 4,447 566 540 9,556 114 15,224 2001 Quantity Value 2,000 3,205 140 1,312 15 103 4,344 5,528 10 6,510 2004 Quantity 17,661 19
777
Importing Country
Africa EU Member Countries USA & Canada Middle East Asia Others Total
Value 2,781 1 2,035 23,507 0 15 28,339
38 10,186
(tons & 000 Birr) 2002 Quantity Value 10,597 33,249 80 62 356 3,107 11,155 69,590 10,000 12,551 550 4,068 32,738 122,626 % change 2004/03 Quantity +297 -97 +44 -10 2,478 +96
Table 26 (contd.) Importing Country

Africa EU Member Countries USA & Canada Middle East Asia Others Total
Value 21,073 3,710 5,794 67,684 606 98,867
Value 51,960 150

6,273
8,601 2,832 29,890
38,456 6,232 103,072
Value +147 -96 +8 -43 1,028 +4
Source: Ethiopian Customs Authority & Consultants calculation. 4.2.9 Export of Live Animals
The country has huge potential in livestock population and Amhara Region is the second largest in the country. The major exports of the country among its livestock resource include cattle/bovine animals and sheep, representing about 85% of the export revenue from live animal exports (see Table 27). These are mainly exported to countries in the Middle East, the principal buyer being Yemen and Jordan. About 70% of the export revenue from live animal export came from these two countries (see Figure 9).
Table 27: Ethiopia's Export of Live Animals 2000 Animal Type Live bovine animals Live goats Live sheep Other live animals Total Number 320 200 35,202 604 36,326 Value 602,003 44,586 10,290,914 20,831 10,958,334 2001 Number 41,374 Value 4,304,145 (No. & Birr) 2002 Number Value 30,552 2,879,850 1,300 3,178 35,030 306,670 1,565,642 4,752,162
1,052 42,426
31,178 4,335,323
48
Table 27 (contd.) 2003 Animal Type Live bovine animals Live goats Live sheep Other live animals Total Number 2,217 3,080 11,706 3,925 20,928 Value 2,983,641 401,028 3,606,813 2,442,247 9,433,729 2004 Number 19,723 1,040 26,250 5,496 52,509 Value 21,512,695 192,784 5,384,618 4,436,808 31,526,905 % change 2004/03 Number Value +790 +621 -66 -52 +124 +49 +40 +82 +151 +234

Figure 9: Percent Share of Live Animals Importing Countries, 2004
Others 7%
Jordan 22%
Libiya 6% Yemen 48% UAE 10% Sudan 7%
Live animal price was reported to be favorable in general. It increased from about Birr 451 in 2003 to Birr 600 per head in the year 2004. However, in the case of the two major exports of the country, price dropped by substantial amounts as is observed by a drop in the percent changes in value compared to volume.
Apart from exporting live animals, the country also exports manufactured meat and meat products. The Middle East countries are again the major importers of meat and meat products from Ethiopia. Among the EU member countries, Germany started importing small quantities in 2001 and finally increased by relatively an incredible amount in 2004. Its import of meat and meat products from Ethiopia increased from a mere Birr 168.9 thousand in 2003 to Birr 2,349.4 thousand by the year 2004 (see Table 28). In general revenue from export of meat and meat products grew at average annual growth rate of 67.9% between year 2001 and 2004, mainly due to a small increase in price. 49
As indicated earlier, Amhara Region, being the second in livestock population, unboundedly accounts a large share of the total export of live animals, meat and meat products.
Table 28: Ethiopia's Export of Meat and Meat Products, 2000 - 2004
2000 Importing Country Germany Saudi Arabia Ukraine United Arab Emirates Yemen Quantity 545,875 615,889 4,196 1,161,764 Value 8,824,210 10,509,441 85,673 19,333,651 2001 Quantity 19 450,419 335,654 11,986 786,092 Value 5,185 7,553,992 5,133,570 279,603 12,692,747 (Kg & Birr) 2002 Quantity Value 48 400 51,247 691,390 23,315 306,734 894,083 11,563,877 106,790 1,215,353 29,697 3,350,951 1,105,18 0 17,128,705
Others
Total Table 28 (contd.)
2002 Importing Country Germany Saudi Arabia Ukraine United Arab Emirates Yemen Others Total Quantity 25 1,101,55 2 1,100 2,195,05 5 184,421 143,173 3,625,32 6 Value 3,123 19,886,499 14,202 32,113,791 2,256,426 1,366,920 55,640,961
2003 Quantity 168,876 1,096,03 5 62,045 2,156,12 2 73,215 11,472 3,567,76 5 Value 2,349,409 18,421,55 6 1,326,442 36,324,99 2 953,589 689,425 60,065,41 3
% change 2004/03 Quantity Value +575504 +65231 -7 +8340 +13 -58 -50 +8
+4640 -2 -60 -92 -2
Source: Ethiopian Customs Authority & Consultants calculation. 4.2.10 Export of Honey and Beeswax The flora and fauna of the country is reported to be suitable for apiculture development. The Central Statistical Authority put the total number of productive bee hives in the country around 4.2 million in the year 2004. Amhara Region had about 766,380 productive bee hives in the same year. The production of honey and beeswax depends on the technology adopted and management practices of beekeepers. Beekeepers currently adopt traditional and modern hives. A traditional hive is estimated to yield 5 Kg of unpurified honey and 0.5 kg of beeswax, while the intermediate and wooden frame modern hives yield 12 kg and 20 kg of honey and 1.2 kg and 0.2 kg 5 of beeswax
5
Source: Ministry of Agriculture Development Studies Associates (DSA) & Shawel Consult International (SCI)
50
respectively.
The honey and beeswax produced are marketed domestically as well as
exported to world market. Export of honey increased both in volume and value during the year 2000 2004, though the quantity exported and the revenue generated were too small to have an impact on the total foreign exchange earning of the country (see Table 29a).
Table 29: Ethiopia's Export of Honey and Beeswax by Country of Destination, 2000 2004
a) Honey Export Importing Country Djibouti Israel Saudi Arabia Sudan United States Yemen Others Total Honey (contd.) Importing Country Djibouti Israel Saudi Arabia Sudan United States Yemen Others Total b) Beeswax Export Importing Country Germany Greece Japan Netherlands United States Others Total Beeswax (contd.) Importing Country Germany Greece 2003 Quantity Value 18,000 352,516 77,000 1,356,456 2004 Quantity 34,000 20,000 Value 848,160 447,368 %change 2004/03 Quantity Value 2000 Quantity Value 85,000 2,096,553 140,935 18,000 51,000 294,935 3,531,328 488,114 1,236,476 7,352,471 2001 Quantity 34,000 70,000 52,000 35,000 191,000 Value 793,068 1,586,193 755,730 807,657 3,942,648 2003 Quantuty Value 3,747 55,803 93 2,570 590 4,233 210 1,824 6,464 7,287 46,539 116,432 2004 Quantuty 731 709 5,100 5,000 1,947 5,321 420 19,228 Value 24,748 19,715 147,285 174,626 46,490 145,846 11,002 569,712 % change 2004/03 Quantuty Value 2000 Quantuty Value 2001 Quantuty 830 650 312 10 580 50 2,432 Value 10,576 22,436 11,262 341 17,125 1,728 63,467 (Kg & Birr) 2002 Quantuty Value 755 17,208 138 3,801 177 6,122
491 1,000 1,491
13,629 14,454 28,083
1,780 116 2,966
46,634 4,488 78,252
-80 +662 +764 +827 +192 +197
-56 +667 +2480 +538 +213 +389
(kg & Birr) 2002 Quantity Value 35,000 591,210 60,000 1,202,347 85,983 1,836,447 33,965 675,574 52,000 1,054,409 266,948 5,359,987
+89 -74
+141 -67
51
Japan Netherlands United States Others Total
103,051 50,000 86,183 68,041 402,275
2,172,953 1,020,232 1,828,895 1,320,606 8,051,658
102,998 78,000 70,000 304,998
3,172,414 1,883,123 2,014,762 8,365,827
+56 -19 -24
+46 +85 +10 +4
Source: Ethiopian Customs Authority & Consultants calculation. The export of beeswax has been much higher both in volume and value compared to honey export. However, the export was not as steady (see Table 29b). Export to some countries declined for unknown reasons. For instance, export to Germany and Greece dropped continuously, while the opposite was true in the case of exports to the Netherlands, Japan and United States.
According to CBI market survey on Beeswax, the main exporting countries of beeswax at a global level include China, Brazil and France. Ethiopia is the second largest exporter of beeswax in Africa. The main competitors to Ethiopian beeswax in the same markets are Tanzania and Cte dIvoire, for which the main destinations of their exports are given in tables 30 and 31. These tables together with Table 29 give an idea of the competition and the potential countries that are interested in beeswax from Africa. Tanzania increased its exports in 2003 by 5 percent compared to 2002. The total exports value was USD 1.4 million; the corresponding volume was 648 tons. Japan was the number one buyer in 2003 (USD 685 million), at a distance followed by The Netherlands, the USA, Germany and Spain. The USA was the largest importer in 2003, increasing its imports by 122 percent compared to 2002.
Table 30: Tanzanias
Exports of Beeswax by Main Destination Countries, 2003

(000 USD & tons)
Importing Countries Total Destinations Japan The Netherlands USA Germany Spain
Value % Share (value) 1,429 100 685 258 218 109 54 48 18 15 8 4
Unit value volume ($/unit) 648 2,205 210 91 256 38 19 3,262 2,835 852 2,868 2,842
% growth in value 5 13 28 122 14 -2 52
Source: ITC P-Maps (November 2004)
Cte DIvoires exports amounted to USD 358 thousand in 2003, an increase of 19% compared to 2002.Germany (91%) and France (9%) are the only countries that imported beeswax in 2003 from Cte DIvoire.
Table 31: Cte DIvoires
Exports of Beeswax by Main Destination Countries, 2003

(000 USD & toes)
Unit value Importing Country Value % Share (value) Total 358 100 Destinations Germany 326 91 France 32 9 Source: ITC P-Maps (November 2004) Volume 125 114 11 ($/unit) 2,864 2,860 2,909
% growth (value) 19 37 -49
CBIs survey result indicated that exports of beeswax have struggled in the last 5 years, probably due to the pest and viral attacks that affected beekeeping activities in China, the EU and the USA. Global exports did not recover until 2003. The growth was 23 percent compared to 2002. The total value was USD 47 million, in volumes 14 thousands tons. Global leaders in exports in 2003 were China (USD 10 million), Brazil (USD 7 million) and France (USD 4 million)6. 4.2.11 Exports of Natural Gum The country has quite large areas suitable for the cultivation of natural gums. The total area estimated under natural gums and resins is around 2,855,000 ha, of which 23.8% is in Amhara Region7. The trees in most cases grow wild in the sparsely inhabited areas with arid conditions. The types of natural gums harvested in the country and exported to world market include gum Arabic, gum olibanum, gum myrrh and gum oppoponex. The major importing countries of Ethiopian natural gum are Tunisia, United Arab Emirates, China, Greece and Germany in that order of importance in terms of both value and
6 7
Source: Export Potential of Ethiopian Beeswax, CBI EU Market Survey, Nov. 2004 Source: Export Potential of Ethiopian Gum, CBI EU Market Survey, Jan. 2005 Development Studies Associates (DSA) & Shawel Consult International (SCI)
53
volume (see Table 32). However, some of them reduced their import over the past five years. For example the export to Germany continuously declined over the period, exhibiting a decline of 28% in volume and 24% in value in 2004 compared to 2003. China and Tunisia offered good prices in 2004, though this depends on quality and type of gum exported.
Table 32: Ethiopia's Export of Natural Gum by Country of destination, 2000 - 2004
2000 Quantity Value 740 4,880 453 6,006 135 1,626 0 0 180 2,639 89 1,365 194 2,983 51 873 1,842 20,372 2001 Quantity Value 710 4,725 450 5,804 165 2,263 0 0 103 2,538 105 1,806 209 3,610 175 1,452 1,917 22,199 (tons & '000Birr) 2002 Quantity Value 1,040 6,664 368 5,322 180 2,489 0 0 21 450 331 5,878 345 6,069 217 3,181 2,502 30,052
Importing Country China Germany Greece Guatemala Saudi arabia Tunisia United Arab Emirates Others Total
Table 32 (contd.)
Importing Country China Germany Greece Guatemala Saudi arabia Tunisia United Arab Emirates Others Total 2003 Quantity Value 692 4,285 320 3,850 195 2,666 159 2,419 87 1,957 312 5,598 693 10,959 262 3,884 2,720 35,618 2004 Quantity Value 832 5,325 230 2,943 242 3,158 81 1,236 31 794 417 7,826 322 6,931 543 6,540 2,698 34,754 % change 2004/03 Quantity Value
+20 -28 +24 -49 -64 +34 -53 +107 -1
+24 -24 +18 -49 -59 +40 -37 +68 -2
Source: Ethiopian Customs Authority & Consultants calculation. According to CBI EU Market Survey report on natural gum total global imports of natural gum amounted to USD 147 million in 2003. India and USA are the largest markets for natural gum; of the total global import in 2003 they held a share of USD 17 million and 12 million respectively. Ethiopia exported to both countries, though not quite significant in volume.
54
4.2.12 Export of Cotton The countrys export of cotton fluctuated in the last five years. No consistent increasing trend was observed. Some countries withdrew from importing cotton from Ethiopia and new ones joined the old buyers of Ethiopian cotton. India and Djibouti continued to import from Ethiopia. However Indias import showed a declining tendency while that of Djiboutis was characterized by upward movement. Countries such as Bangladesh, South Africa, Singapore, Turkey and Switzerland started importing cotton from Ethiopia in 2003 and their import level showed some improvement in the following year (see Table 33). In aggregate cotton export in 2004 declined both in volume and value compared to 2002
Table 33: Ethiopia's Export of Cotton by Country of destination, 2000 - 2004 2000 Quantity Value 0 1,140 498 5,534 5 8,627 3,571 29,538 2001 Quantity 63 3,671 543 1,183 Value 621 32,899 4,860 10,878 (tons & '000 Birr) 2002 Quantity Value 3 1,952 927 9 15,820 5,869
Importing Country Bangladesh Djibouti India Indonesia Oman Pakistan Portugal Singapore South Africa Swaziland Switzerland Taiwan Province Of China Turkey Others Total
250 1,167 8,090 12,389
1,582 9,137 11,697 44,114
501 7,673
5,666 47,407
554 6,015
5,161 54,419
55
Table 33 (contd.) Importing Country Bangladesh Djibouti India Indonesia Oman Pakistan Portugal Singapore South Africa Swaziland Switzerland Taiwan Province Of China Turkey Others Total 2003 Quantity Value 344 2,111 162 1,534 614 5,151 1,925 17,755 536 200 946 1,058 155 1,910 34 7,175 6,842 2,544 12,220 12,424 1,974 19,278 454 83,576 2004 Quantity Value 197 2,515 547 6,472 288 2,432 1,305 16,422 % change 2004/03 Quantity Value -43 +19 +236 +322 -53 -53
360 604 438 3,588 1,266 1,728 843 11,872
5,025 5,584 4,644 35,872 11,692 15,956 7,966 113,290
-44 +57 -71 -88 +11 -96 -40
-49 +119 -65 -83 +21 -94 -26
Source: Ethiopian Customs Authority & Consultants calculation. 4.2.13 Export of Textiles Textiles, clothing and apparels are export commodities of the country in the category of manufactured products. The country earned a foreign exchange amounting to an equivalent of Birr 21.6 million in 2000 and the earning increased to Birr 72.8 million in 2004, growing at an average annual growth rate of 35.4% over the last five years. There are two textile factories in Amhara Region both engaged in export. The Regions share in the countrys total export of textiles depends on the two factories. The major destinations of Ethiopian textiles include EU member countries such as Belgium, Germany, Italy and Great Britain, and USA (see Table 34).
Table 34: Ethiopia's Export of Textiles by Country of Destination, 2000 - 2004
Importing Country Belgium Djibouti China France Germany Great Britain Israel 2000 3,458,565 976,267 444,310 1,880,900 1,224,619 13,309 2001 2,362,280 2,431,176 569,335 139,761 2002 10,662,368 211,282 129,434 667,347 1,370,549 469,061 126,471 2003 31,207,88 1 1,671,896 3,272,788 474,190 5,821,479 2,548,565 268,413 2004 15,973,701 398,327 2,050,317 947,243 15,070,453 4,382,217 397,337 ( Birr) %change 2004/03 -49 -76 -37 +100 +159 +72 +48
56

11,892,39 3 3,619,443 112,958 640,729 542,808 3,644,662 101,634 748,895 66,568,73 4
Italy Spain Swaziland Sweden Switzerland Turkey United States Yemen Others Total
8,877,819 3,711,803 6,745 303,342 409,229 319,011 24,665 21,650,584
11,053,532 1,734,469 2,268,977 7,585,637 207,920 814,905 3,165,807 1,309,593 1,364,925 35,008,317
7,921,500 658,008 2,717 522,170 6,814,488 142,017 7,511,417 578,176 832,549 38,619,554
11,010,774 723,987 202,019 577,753 380,878 944,640 14,420,663 37,967 5,303,643 72,821,919
-7 -80 +79 -10 -30 +296 -63 +608 +9
Source: Ethiopian Customs Authority & Consultants calculation. 4.2.14 Export of Cut Flowers Investment in cut flowers for export was a very recent experience of the country. Investors engaged in growing flowers are currently concentrated in and around Addis Ababa where cargo planes are easily available. Cut flowers are expected to arrive fresh at the country of destination. EU is the major market for Ethiopian cut flowers. The European Union is believed to consume over 50% of the worlds flowers. Germany is the biggest consumer, followed by the UK, France and Italy. Ethiopia exports to all of them including the Netherlands.
Table 35: Ethiopia's Export of Flowers by Country of Destination, 1999 - 2004
2000 Importing Country Germany Great Britain Italy Netherlands Others Total Table 35 (contd.) 2003 Importing Country Germany Great Britain Italy Netherlands Others Total Quantity 1,000 1,900 2,900 Value 2,595,213 26,008 2,621,220 544 9,736 1,104 15,776 40,841 200,258 30,444 3,925,408 2004 Quantity Value 4,392 3,653,866 Quantity 124,099 6,636 45,187 13,219 189,141 Value 2,172,417 75,668 499,272 384,817 3,132,174 Quantity 500 3,670 20 4,190 2001 Value 1,156,254 70,701 426 1,227,382 (Kg & Birr) 2002 Quantity Value
2,832 6,689 10 9,531
36,743 129,835 173 166,750
57
The local government of Amhara Region has already started encouraging investors to make use of the potential land the Region possesses for growing flowers for export. A trial production conducted in the Region has proved the suitability of the land for flower production. 5 5.1 PROSPECTS AND POTENTIAL FOR GROWTH Policy Implication for the Development and Integration of Trade
The Federal Government of Ethiopia has launched a program to bring about an accelerated and sustained development to end poverty over the period 2005/06 to 2009/10. The initiative known as Plan for Accelerated and Sustained Development to End Poverty (PASDEP) is a national program advocating the principle of a pro-poor economic growth. Strategies and action plans to end poverty have been developed and are under implementation in all economic and social sectors by all sector organizations and line departments at both Federal and Regional levels. The initiative is expected to contribute directly to the development and integration of trade at regional, national and global levels. The government has already streamlined areas of focus along this perspective. This includes promoting and fostering the commercialization of agriculture, private sector development, export development, tourism development, and infrastructure development (water resource, water supply and sanitation, road and transport, power and telecommunication). As it is clearly stated in the PASDEP-document, in order to generate a massive push to accelerate growth in agriculture and rural development there is a need to focus on the commercialization of agriculture and promotion of much more rapid non-farm private sector growth. The rationale for the commercialization of agriculture lies on the fact that the transformation from subsistence practice to a more business/market-oriented production system, while protecting the essential agricultural base on which the poor depend for their livelihoods, would bring sustained economic development.
58
Furthermore, there is a need for a systemic approach to realize the greater involvement of the private sector in the rural economy in value adding and processing activities. It will be difficult to address the challenges of development in the Ethiopian agricultural sector which is the backbone of the economy. As it is also clearly stated in the PASDEP, the majority of the response in achieving fast growth in rural economy has to come from the private sector. If the dynamism and entrepreneurial talent of the private sector is synchronized within a rural economic framework, then it will be easier to achieve fast economic growth. The implication of this policy issue for Amhara Region needs to be reviewed from the agricultural potential of the Region. Agriculture is the major economic sector of the Region. It comprised on average about 56% of the Regions GDP (Bureau of Finance & Economic development). However, much of the production from the sector remains to be at subsistence level. It is expected that within the next five years the transformation of the sector from subsistence to a more market-oriented production system will bring about positive changes in the livelihood of the population of the region who depend on agriculture, thereby ensuring food security at household level. The PASDEP has already laid basic and alternative strategies to achieve this objective of expanding the commercialization of agriculture. As a result the Region will have a strong position because of its comparative agricultural resource base advantage to supply agricultural products to the global and national markets. An increased participation of the private sector in all spheres of development endeavours is crucial to bring about a fast growth in the economy of the country. Thus, the Federal Government of Ethiopia in cognizant of this fact has taken rational measures to develop the private sector. The private sector development initiative in the context of PASDEP aims to address outspoken and predominant problems inherent in all the economic and social sectors of the country. The principles underlying the PASDEP strategy include a commitment to ease, as is clearly articulated in the document, the environment for private investment and business activity, to replace the hitherto significant role of the state with greater domestic and foreign private participation, and to strongly support the growth of export industries by
59
finding all-round solutions to the following major problems if what is envisaged in PASDEP within the context of private sector development is to bear fruit: Much of Ethiopian industry is not competitive. Productivity is low, and quality often does not meet international standards. The technology used is often old and obsolete. Technological information is not easily available to entrepreneurs. The skills and qualifications of the workforce are often inadequate for modern industrial production. Most owners/managers of manufacturing industries do not have a modern management qualification and background, but come from a more traditional crafts background. Entrepreneurship is not firmly rooted in Ethiopian society and moreover suffered greatly under the former socialist regime. Entrepreneurs complain about the difficulty of access to finance. Start-up finance for micro and small business, particularly for cooperatives, is to some extent available through a limited number of microfinance institutions. The banking system, particularly that of the dominant state-owned Commercial Bank of Ethiopia (CBE), suffers from non-performing loan portfolios and only provides mostly short-term loans. Long-term investment finance is hard to obtain, although some financing is available for export-oriented sectors from the Development Bank. Finding land and premises for business operations is described as cumbersome, partly due to the fact that private landownership does not exist in Ethiopia. Therefore, land allocation goes through public sector channels and can involve long bureaucratic procedures. The Amhara Region, in view of the size of its population, endowment with potential agricultural and water resources, and significance in the history of the country as a tourism center, is expected to have a major stake in the effort to reduce poverty as stipulated in PASDEP within the next five year period.
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5.2
Export
Amhara Region has great potential for exportable agricultural commodities. The overall share of the Region in the total agricultural production has been observed to be substantial, estimated to hold a share of about 30% of the crop production of the country. Its share in livestock resource has been also large. Similarly its share in the total export of the country is also believed to be quite large. For instance, a large amount of the exports of oilseeds, pulses and spices are believed to originate from the Region, as the Region has good comparative resource advantage for growing these crops. Yet a lot remains to be done to fully utilize its agricultural resources. According to the Bureau of Agriculture, the Region still has large hectares of land readily available for agricultural development. The effort of the Region in promoting coffee, the major export commodity of the country, and flower production has been highly encouraging and exemplary. The Region undoubtedly has good prospects and potential for expanding its agricultural export products. A medium-term export forecast for the Region has been established under certain assumptions as reliable export data at Regional level was hardly available. The following sets of assumptions, developed on the bases of production data in the agriculture and industry sectors, have been used to establish the export share of the Region for selected commodities covering the period 1998 2004. The ratio of the Regions agricultural production to total production of the country for cereals, oilseeds, spices, fruits and vegetables (Ratio = 0.30). Export of permanent crops such as coffee and chat are excluded from being considered as the Region is not currently a potential exporter of these crops. The ratio of the gross value of production of manufacturing establishments existing in the Region to country total (Ratio = 0.13) for manufactured products export and those grouped under others. The ratio of livestock population of the Region to country total (Ratio = 0.28) for live animals export.
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The ratio of estimated production of natural gum of the Region to country total (Ratio = 0.79) for natural gum export.
The ratio of the number of beehives in the Region to country total (Ratio = 0.18) for honey and beeswax export.
The ratio of production of hops in the Region to country total (Ratio = 0.22).
The export of the Region has been established from the total export of the country using the above ratios and is presented in Table 36.
Table 36: Estimated Export of Amhara Region by Selected Commodities, 1998 - 2004
(Birr)
Commodity Hides and Skins Oil Seeds Pulses Spices Fruits Vegatables Live Animals Cereals Animal fodder Beeswax Cotton Hop Meat & meat products Natural Gum Textile, Clothing & Apparel Others Grand Total 1998 81,287 71,848 22,343 7,546 2,354 7,277 1,594 5,092 0 2,439 3,211 66 4,787 11,615 1,849 11,789 235,096 1999 67,499 74,746 34,678 6,232 2,939 6,462 2,511 5,442 242 1,305 11,700 131 4,000 14,548 2,288 2,796 237,522 2000 109,361 70,733 25,316 8,022 2,642 5,214 3,068 8,502 203 1,323 14,222 602 2,525 19,136 2,814 2,047 275,730 2001 176,620 95,166 56,880 11,700 3,641 11,095 1,214 3,055 589 855 16,444 522 1,686 18,889 4,568 22,952 425,876 2002 147,109 100,729 93,514 10,812 6,812 13,567 1,331 36,788 695 965 13,234 393 1,903 23,741 5,021 3,972 460,586 2003 136,196 156,692 52,359 15,797 4,199 12,266 2,632 29,660 335 1,449 34,001 506 7,147 28,138 8,232 100,925 590,536 2004 165,199 220,986 91,697 21,958 6,227 21,677 8,828 31,039 310 1,506 25,073 368 8,105 27,455 9,177 34,299 673,905
Average
126,182 112,986 53,827 11,724 4,116 11,080 3,025 17,083 339 1,406 16,841 370 4,308 20,503 4,850 25,540 414,179
% Share
30.47 27.28 13.00 2.83 0.99 2.68 0.73 4.12 0.08 0.34 4.07 0.09 1.04 4.95 1.17 6.17 100.00
During the last seven years export from the Region increased from about Birr 235.1 million in 1998 to Birr 673.9 million in the year 2004, registering an average growth rate of 19.2% per annum. However, individual commodity exports appeared to fluctuate from year to year during the period under review. Export of hides and skins took the largest share to be followed by oilseeds and pulses in that order of importance. A medium forecast covering the next five years has been established for the total export of the Region based on a linear relationship between time and the value of export. The linear relationship turned out to have the following equation and is found to explain the variation adequately, with a correlation coefficient of 0.97. y = 98849 + 78833t, where y represents value of export and t time.
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The export of the Region in the next five years using the regression equation is presented in Table 37a. The forecast value for individual commodity has been developed using the share each held in the total export value of the Region. An alternative forecast based on average annual growth rate method is also presented in Table 37b.
Table 37: Export Forecast for Amhara Region , 2005 2009
(000Birr) a) Linear Extrapolation method Commodity Hides and Skins Oil Seeds Pulses Spices Fruits Vegetables Live Animals Cereals Animal fodder Beeswax Cotton Hop Meat & meat products Natural Gum Textile, Clothing & Apparel Others Grand Total Table 37 continued. 2005 222,250 199,007 94,808 20,650 7,250 19,515 5,329 30,089 597 2,476 29,662 651 7,587 36,113 8,542 44,985 729,513 2006 246,267 220,513 105,053 22,882 8,034 21,624 5,904 33,340 662 2,744 32,868 722 8,407 40,016 9,465 49,846 808,346 2007 270,284 242,018 115,298 25,113 8,817 23,733 6,480 36,591 726 3,012 36,073 792 9,227 43,918 10,388 54,708 887,179 2008 294,301 263,523 125,543 27,345 9,601 25,842 7,056 39,843 791 3,279 39,279 863 10,047 47,821 11,311 59,569 966,012 2009 318,317 285,028 135,788 29,576 10,384 27,950 7,632 43,094 855 3,547 42,484 933 10,867 51,723 12,235 64,430 1,044,845
b) Average annual growth rate method

Hides and Skins Oil Seeds Pulses Spices Fruits Vegetables Live Animals Cereals Animal fodder Beeswax Cotton Hop Meat & meat products Natural Gum Textile, Clothing & Apparel Others Grand Total 150,409 134,679 64,161 13,975 4,907 13,207 3,606 20,363 404 1,676 20,074 441 5,135 24,440 5,781 30,444 493,701 179,287 160,537 76,480 16,658 5,849 15,743 4,299 24,272 482 1,998 23,928 526 6,121 29,132 6,891 36,289 588,492 213,710 191,361 91,165 19,857 6,972 18,765 5,124 28,932 574 2,381 28,523 626 7,296 34,726 8,214 43,257 701,482 254,743 228,102 108,668 23,669 8,310 22,368 6,108 34,487 684 2,839 33,999 747 8,696 41,393 9,791 51,562 836,167 303,653 271,897 129,533 28,214 9,906 26,663 7,280 41,109 816 3,384 40,527 890 10,366 49,340 11,671 61,462 996,711
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5.3 Import The country heavily depends on imports for capital goods and all assortments of manufactured consumer products. As a result its import bill exceeds its export revenue by nearly seven times in 2004. That part of the total import estimated as the share of Amhara Region has been again used to prepare a medium-term forecast for the Region. The underlying assumption in preparing the forecast as is the case for export is that the economic, social and political environment that prevailed in the last seven years would continue influencing in the same magnitude and direction the development scenarios of the Region. Accordingly a linear extrapolation has been adopted to project the Regions import requirement for the next five years. An alternative forecast is also provided using average annual growth rate that prevailed in the last eight years. The Region thus will require imported commodities in the range of a value of about Birr 5.8 billion in 2005 and Birr 7.1 billion in 2009 based on linear extrapolation method. For details see Table 38a and 38b.
Table 38: Medium - Term Import Forecast for Amhara Region
(million Birr) a) Linear extrapolation method Commodity Capital Goods (Agricultural) Capital Goods (Industrial) Capital Goods (Transport) Consumer Goods (Durable) Consumer Goods (Non-durable) Fuel Raw Material Semi-finished Goods Miscellaneous Total b) Average annual growth rate method Capital Goods (Agricultural) Capital Goods (Industrial) Capital Goods (Transport) Consumer Goods (Durable) Consumer Goods (Non-durable) Fuel Raw Material 2005 51,483 729,505 651,861 653,844 1,323,128 1,054,595 56,960 1,101,364 146,424 5,769,165 62,000 878,524 785,019 787,407 1,593,408 1,270,021 68,596 2006 48,501 687,249 614,102 615,970 1,246,48 7 993,508 53,661 1,037,56 8 137,943 5,434,99 0 74,400 1,054,22 9 942,022 944,888 1,912,09 0 1,524,02 6 82,315 2007 53,351 755,974 675,512 677,567 1,371,135 1,092,859 59,027 1,141,325 151,737 5,978,489 89,280 1,265,075 1,130,427 1,133,866 2,294,508 1,828,831 98,778 2008 58,201 824,699 736,922 739,164 1,495,784 1,192,210 64,393 1,245,082 165,531 6,521,988 107,136 1,518,090 1,356,512 1,360,639 2,753,409 2,194,597 118,533 2009 63,051 893,424 798,333 800,761 1,620,433 1,291,561 69,759 1,348,839 179,326 7,065,487 128,563 1,821,708 1,627,815 1,632,767 3,304,091 2,633,516 142,240
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1,591,61 2 211,602 8,337,18 5
Semi-finished Goods Miscellaneous Total
1,326,344 176,335 6,947,654
1,909,935 253,922 10,004,622
2,291,922 304,707 12,005,54 7
2,750,306 365,648 14,406,656
5.4
Project Ideas for Investment
The Regions demands for manufactured durable and non-durable consumer goods are largely met through import supplemented by goods supplied from domestic manufacturing establishments. The Region as noted earlier has great resource potential for investment. The import statistics of the country contains list of goods imported from different countries. There appears to be ample opportunity to promote import substituting projects in the Region in view of cheap labour availability and other resource comparative advantages in selected sectors. Preliminary lists of project ideas are compiled from import statistics of the country and some from the resource base of the Region for promotion and are subject for further screening by developing appropriate investment criteria. The following two criteria were adopted for proposing the project ideas originating from import statistics of the country: Import volume as an indicator of domestic market opportunity for the proposed idea; and Growth trends as an indicator of the existence of a continuously growing domestic market for the proposed idea. Project Ideas for Promotion: 1. Bamboo furniture 2. Hairpins; curling pins, curling grips 3. Pocket lighters, gas fuelled, non-refillable 4. Honey production 5. Peas, fresh or chilled 6. Dried peas, shelled
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7. Dried beans, shelled 8. Dried lentils, shelled 9. Apples, fresh and juice 10. Durum wheat 11. Semi-milled or wholly milled rice or broken rice 12. Maize (corn) flour 13. Malt production 14. Soya bean flour and meal 15. Edible linseed oil 16. Edible vegetable fats and oils 17. Cane sugar plant 18. Glucose and glucose syrup 19. Infant and invalid food products 20. Macaroni and spaghetti 21. Paraffin wax 22. Carbon (carbon blacks and other forms of carbon) 23. Hydrogen peroxide 24. Isocyanides 25. Printing ink 26. Resinoids of kind used in non-alcoholic drink industries 27. Personal deodorants and antiperspirants 28. Insecticides 29. Herbicides, anti-sprouting products and plant growth regulators 30. Diagnostic/laboratory reagents
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31. Polyethylene 32. Polypropylene, in primary forms 33. Polyvinyl chloride 34. Polyvinyl acetate in aqueous dispersion 35. Fittings, for tubes, pipes and hoses, of plastic 36. Baths, shower-baths and wash-basins, of plastics 37. PVC Floor tiles 38. Plastic household goods 39. Sacks and bags of plastics 40. Surgical gloves 41. Gaskets, washers and other seals, of vulcanized rubber 42. Hand bags 43. Paper and paperboard 44. Toilet paper 45. Envelopes of paper or paperboard 46. Cartons, boxes and cases, of corrugated paper or paperboard 47. Folding cartons, boxes and cases, of non-corrugated paper or paperboard 48. Exercise books 49. Woven fabrics of synthetic yarn 50. T-shirts 51. Men's or boys' trousers, breeches of textiles 52. Babies' garments and clothing accessories of synthetic fibers 53. Blankets of synthetic fibers 54. Sacks and bags, for packing goods, of polyethylene/polypropylene strip
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55. Millstones and grindstones for milling, grinding or pulping 56. Screws and bolts of iron or steel 57. Safety razor blades 58. Fire extinguishers 59. Flash lights 60. Plugs and sockets 61. Aggregate production for construction 62. Absorbent cotton 63. Agricultural implements 64. Locks and keys 65. Plastic shoes 66. Aluminium frames and profiles 67. Animal Feed 68. Beeswax 69. Biscuit 70. Bolts and nuts production 71. Brush and broom 72. Canned fruits and vegetables for export 73. Printing press 74. Corrugated iron sheet Cupboard and drawer locks 75. Paper cups and plates 76. Liquid and powder detergent 77. Electrical fittings and accessories
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78. Fruit based drinks 79. Industrial adhesives 80. Leather Tannery 81. Leather Garments 82. Leather upper and shoes 83. Acrylic Yarn for textile factories 84. Medical syringes 85. Nails, tacks, drawing pins, corrugated nails of iron or steel 86. Oxygen and Carbon dioxide production plant 87. Ply wood production plant 88. Plastic chairs 89. Roof tiles from clay 90. Spice production 91. Towels production plant 92. Umbrella manufacturing plant 93. Welding electrode manufacturing plant 94. Mosquito net, sports net and fishing net 95. Canned fish production plant 96. Pasturized milk, butter and cheese. 97. Artificial leather 98. Masking and cellophane tapes, stickers 99. Varnish production
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PRICE TRENDS AND VARIATION
6.1 Prices of Major Agricultural Products The Amhara Regional Bureau of Trade and Industry compiled monthly average retail prices of selected agricultural products, manufactured products and services in 22 25 major towns in the Region, covering the period 1991 1994 (EC); prices that prevailed in the year 1995 and 1996 are not compiled. Although the original price compilation refers to specific products in the above categories, the description on price variation given here is based on aggregate prices. The prices of cereals in 1992 increased by about 6% compared to the price, which prevailed in 1991. However, in 1993 and 1994 the price showed a substantial drop compared to 1992 prices. It dropped by about 27% in 1993 in comparison to 1992 and by about 14% in 1994 compared to the price in 1993 (See Table 39). Price usually drops when there is excess supply in the market. The above variation occurred as a result of increased supply of cereals and the change will prevail in most cases for sometime in the future until buyers observe noticeable shift in volume of supply. This was exactly what happened in the case of cereals. The volume of supply in 1994 was a little lower than the volume supplied in 1993, but price continued declining. Similar variation was noted in the prices of other agricultural products, with the exception of meat price, which increased consistently over the period.
Table 39: Average Prices of Major Agricultural Products in Amhara Region, 1991 - 1994
(Birr/kg) % change (1992/91) +5.66 +0.07 -1.84 +13.60 +2.12 % change (1993/92) -26.92 -31.82 -27.3 -7.56 -16.24 +4.25 % change (1994/93) -13.72 -11.28 -7.78 -24.15 -1.37 +1.00
Crop type Cereals Pulses Oilseeds Coffee Butter Meat
1991 1.72 2.26 2.72
1992 1.82 2.27 2.67 13.62
1993 1.33 1.54 1.94 12.59
1994 1.15 1.37 1.79 9.55
20.00 10.37
22.72 10.59
19.03 11.04
18.77 11.15
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The prices of major agricultural products tend to vary according to the agricultural season of the Region. Prices remain above the average for the year during the months of Meskerem, Tikimt, Sene, Hamle and Nehasse. These months are characterized by low supply of agricultural products and as a result prices are forced to remain above the average for the year. In the remaining months, from Hidar up to Ginbot, the prices of most agricultural commodities appear to vary below the average for the year. For detail see the seasonal variation of cereals, pulses and oilseeds prices presented in Figure 10.
Figure 10: Price Seasonality of Major Crops
140 120 100 Seasonal Index 80 60 40 20 0
ar Ti r Se ne
Cereals Pulses Oilseeds
it
eg ab it
Ha m le
ia zi a
sa s
Ti ki m
bo
es kr em
Ye ka t
Ta hi
G in
Month
The latest trends of farm gate and retail prices of agricultural products are presented in Table 40. In general both farm gate and retail prices dropped in 1997 when compared to prices a year before. The drop in farm gate prices of cereals and pulses was significant. The highest drop occurred in the farm gate prices of teff mixed, maize, durhham, and sorghum in the cereal group and from the pulse crops farm gate prices of peas, lentils and fenugreek also dropped sharply. A similar drop was noted in the retail prices of all cereals but the drop was not as large as in the case of farm gate prices. The reason could be attributed to excess supply of agricultural products in 1997 (See Table 40 (a).
Ne h
as se
Hi d
71
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Amhara National Regional State (ANRS) Table 40: Farm Gate and Retail Prices of Agricultural Products
a) Trends in farm gate and retail prices Farm gate prices Commodity Cereals Unmilled Teff White Teff Mixed Teff Black Wheat white Wheat Mixed Wheat Black Barley White Barley Mixed Barley Black Maize Durhham African Millet Sorghum Yellow Sorghum White Sorghum Red Oats Rice Pulses Unmilled Horse beans Chickpeas Peas white Peas mixed Soya beans Lentils Haricot beans Lima beans Vetch Fenugreek Oilseeds Niger seed Linseed white Linseed black Sesame seed sunflower Castor beans Rape seed Ground Nuts shelled 1996 2.44 2.32 2.11 1.80 1.80 1.88 1.82 1.72 1.66 1.39 1.56 1.63 1.68 1.53 1.57 1.75 2.32 1.77 1.87 2.14 2.01 1.99 3.18 1.06 1.21 1.44 2.68 2.94 3.92 3.00 4.86 1.91 1.52 1.91 1997 2.26 2.05 1.94 1.63 1.78 1.72 1.69 1.63 1.61 1.21 1.32 1.47 1.44 1.30 1.28 1.74 1.79 1.68 1.84 1.86 1.83 2.82 2.78 1.02 1.45 1.52 2.23 2.98 2.14 3.01 4.84 1.80 2.20 1.87 2.86 % change -7.4 -11.6 -8.1 -9.4 -1.1 -8.5 -7.1 -5.2 -3.0 -12.9 -15.4 -9.8 -14.3 -15.0 -18.5 -0.6 -22.8 -5.1 -1.6 -13.1 -9.0 41.7 -12.6 -3.8 19.8 5.6 -16.8 1.4 -45.4 0.3 -0.4 -5.8 44.7 -2.1 1996 2.59 2.43 2.32 2.07 2.00 2.08 2.12 2.00 2.02 1.52 1.73 1.85 1.90 1.81 1.77 2.39 5.25 2.07 2.16 2.67 2.33 3.22 3.72 1.57 1.70 1.89 3.27 4.15 5.13 3.90 6.42 3.09 2.78 2.73 5.52
Retail prices 1997 2.39 2.22 2.15 1.95 1.94 1.97 2.02 1.90 1.97 1.46 1.68 1.77 1.84 1.68 1.77 2.32 4.97 2.03 2.14 2.56 2.25 3.48 3.51 1.88 1.75 1.89 3.31 4.31 5.24 4.08 5.86 3.22 2.90 2.90 5.60 % change -7.7 -8.6 -7.3 -5.8 -3.0 -5.3 -4.7 -5.0 -2.5 -3.9 -2.9 -4.3 -3.2 -7.2 0.0 -2.9 -5.3 -1.9 -0.9 -4.1 -3.4 8.1 -5.6 19.7 2.9 0.0 1.2 3.9 2.1 4.6 -8.7 4.2 4.3 6.2 1.4
Agricultural products are retailed at prices much higher than the farm gate prices. The return to the producer appears to be small compared to the amount earned by the retailer.
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However, the percentage difference between the farm gate and retail prices, presented in Table 40 (b), did not include other costs that farmer or retailer incurred in the transaction process. Thus it is hardly possible to say the earning of the producer is less by that amount or the retailers earning greater by that amount.
b) Comparison of farm gate and retail prices of agricultural products 1996 Commodity Producer Retail Producer Price Price % change Price Cereals Unmilled Teff White 2.44 2.59 6.1 2.26 Teff Mixed 2.32 2.43 4.7 2.05 Teff Black 2.11 2.32 10.0 1.94 Wheat white 1.80 2.07 15.0 1.63 Wheat Mixed 1.80 2.00 11.1 1.78 Wheat Black 1.88 2.08 10.6 1.72 Barley White 1.82 2.12 16.5 1.69 Barley Mixed 1.72 2.00 16.3 1.63 Barley Black 1.66 2.02 21.7 1.61 Maize 1.39 1.52 9.4 1.21 Durrahm 1.56 1.73 10.9 1.32 African Millet 1.63 1.85 13.5 1.47 Sorghum Yellow 1.68 1.90 13.1 1.44 Sorghum White 1.53 1.81 18.3 1.30 Sorghum Red 1.57 1.77 12.7 1.28 Oats 1.75 2.39 36.6 1.74 Rice 2.32 5.25 126.3 1.79 Pulses Unmilled Horse beans 1.77 2.07 16.9 1.68 Chickpeas 1.87 2.16 15.5 1.84 Peas white 2.14 2.67 24.8 1.86 Peas mixed 2.01 2.33 15.9 1.83 Soya beans 1.99 3.22 61.8 2.82 Lentils 3.18 3.72 17.0 2.78 Haricot beans 1.06 1.57 48.1 1.02 Lima beans 1.21 1.70 40.5 1.45 Vetch 1.44 1.89 31.3 1.52 Fenugreek 2.68 3.27 22.0 2.23 Oilseeds Niger seed Linseed white Linseed black Sesame seed sunflower Castor beans Rape seed Ground Nuts shelled 1997 Retail Price 2.39 2.22 2.15 1.95 1.94 1.97 2.02 1.90 1.97 1.46 1.68 1.77 1.84 1.68 1.77 2.32 4.97 2.03 2.14 2.56 2.25 3.48 3.51 1.88 1.75 1.89 3.31
% change 5.8 8.3 10.8 19.6 9.0 14.5 19.5 16.6 22.4 20.7 27.3 20.4 27.8 29.2 38.3 33.3 177.7 20.8 16.3 37.6 23.0 23.4 26.3 84.3 20.7 24.3 48.4
2.94 3.92 3.00 4.86 1.91 1.52 1.91
4.15 5.13 3.90 6.42 3.09 2.78 2.73 5.52
41.2 30.9 30.0 32.1 61.8 82.9 42.9
2.98 2.14 3.01 4.84 1.80 2.20 1.87 2.86
4.31 5.24 4.08 5.86 3.22 2.90 2.90 5.60
44.6 144.9 35.5 21.1 78.9 31.8 55.1 95.8
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6.2 Manufactured Food Products An increase in retail prices of most manufactured food products have been noted during the period 1991 1993. However, in 1994 price dropped below that prevailed in the previous years in all categories of manufactured food products. The highest drop was noted in the prices of sugar, flour and rice (see Table 41).
Table 41: Average Retail Prices of Manufactured Food Commodities in Amhara Region, 1991 1994
(Birr/kg)
Commodity Sugar Salt Tea (per packet) Edible Oil (per liter) Flour Pasta Macaroni Rice
1991
1992
% change (1992/91)
1993
% change (1993/92)
1994
% change (1994/93)
4.96 1.60 1.72 11.40 3.76 5.61 5.06 4.29
5.49 1.45 1.98 13.77 3.93 6.27 5.21 4.63
+10.69 -9.37 +15.12 +20.79 +4.52 +11.76 +2.96 +7.93
5.95 1.56 2.00 9.95 3.78 6.59 5.32 4.42
+8.38 +7.59 +1.01 -27.74 -3.82 +5.10 +2.11 -4.54
4.73 1.41 1.98 8.92 3.20 6.57 5.21 3.78
-20.5 -9.62 -1.00 -10.5 -15.34 -0.30 -2.07 -14.48
6.3 Building Materials Prices are compiled for few building materials. The prices of all reported materials except cement dropped in 1994 compared to prices registered in the previous years. A significant drop was noted in the price of corrugated iron sheet, almost a 10% drop compared to 1993. The drop in the other materials has been also favorable to consumers. Slight upward shift was noted in 1993 compared to 1992 in the prices of most materials, except cement which exhibited a decline of about 6%. For detail see Table 42.
Table 42: Average Prices of Building Materials in Amhara Region, 1991 - 1994
% change (1992/91 ) % change (1993/92 ) % change 1994 (1994/93)
Type of building items Electric bulb Nails Iron sheet (corrugated) Cement
unit Piece Kg piece 50kg
1991
1992
1993
2.32 7.55 27.28 71.39
2.28 7.97 38.13 40.31
-1.72 5.56 39.77 -43.54
2.32 7.97 38.37 37.83
1.75 0.00 0.63 -6.15
2.16 7.61 34.72 37.84
-6.90 -4.52 -9.51 0.03
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6.4 Textiles Textile prices dropped invariably in 1994 compared to prices in 1993, with the exception of abujedi both light and heavy where a 3% and 4% rise was observed respectively. In general prices of textiles during the period 1991 1994 appeared to fluctuate within a modest range. Details of textile price variation for the period under review are presented in Table 43.
Table 43: Average Prices of Textiles in Amhara Region, 1991 - 1994
% change % change (1993/92 ) % change 1994 (1994/93)
Textile products Bed sheet light Bed sheet heavy Blankets woolen Blankets cotton Abujedi light Abujedi heavy Khaki drill Khaki twill Yarn
Unit Piece " " " Meter " " "
1991
1992
(1992/91)
1993
37.20 53.05 92.72 77.49 4.53 5.13 10.90 11.51 4.38
38.21 53.01 92.23 90.02 4.56 5.03 11.57 12.13 4.73
2.72 -0.08 -0.53 16.17 0.66 -1.95 6.15 5.39 7.99
36.91 53.96 93.89 82.72 4.71 5.08 11.36 12.89 4.36
-3.40 1.79 1.80 -8.11 3.29 0.99 -1.82 6.27 -7.82
35.28 53.04 90.15 80.36 4.86 5.30 10.80 12.65 4.34
-4.42 -1.70 -3.98 -2.85 3.18 4.33 -4.93 -1.86 -0.46
ENTREPRENEURSHIP DEVELOPMENT
The primary barrier to economic growth in many developing countries is often argued to be scarcity of both the dynamic entrepreneurs who can bring capital, labor or land together and the markets and mechanisms that can facilitate them in this task. Micro and small entrepreneurships are by and large common forms of employment in developing countries. The former in almost all cases operates outside the formal legal system. Public institutions and donors including NGOs, bilateral and multilateral agencies are currently playing a key role in entrepreneurship development of micro, small and medium enterprises. The United Nations Development Programme (UNDP) defines Entrepreneurship as the process of using private initiative to transform a business concept into a new venture or to grow and diversify an existing venture or enterprise with high growth potential. In developing countries not all private initiated micro, small and medium enterprises qualify for entrepreneurship. Some, however, have untapped potential and dynamism to be
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transformed so easily into successful entrepreneurs, while others just do not posses the key prerequisites for entrepreneurial success. The task of enhancing entrepreneurial skills and knowledge thus requires structured approaches to identify those potential enterprises which need those skills most. These tasks presumably fall in the hands of public institutions and donor agencies. The Ethiopian government, cognizant of the role micro and small enterprises are playing in the economic development of the country, has been taking various measures in collaboration with the donor community and civil societies to enhance the entrepreneurial skills of individuals operating in micro and small enterprises. A Micro and Small Enterprise Agency has been established on the part of the government at Regional level as part of a public entrepreneurship development program. Donors and other private organizations are also participating in the provision of entrepreneurial skill training to micro and small enterprises. In Amhara Region both public and donor agencies are contributing to some degree to the promotion and development of entrepreneurship skills of micro and small enterprises. 7.1 ENTREPRENEURSHIP DEVELOPMENT IN AMHARA REGION 7.1.1 Activities of Local Institutions
Entrepreneurship development refers to the process of enhancing entrepreneurial skills and knowledge through structured training and institution-building programs. The activities of upgrading the entrepreneurial skills and knowledge of trade operators in Amhara Region are currently handled by few organizations. The chambers of commerce, operating in major towns of the Region, regularly organize short term training, workshops and trade fairs with the objective of enhancing the entrepreneurial skills of their members. A discussion was held with one official of the Bahir Dar Chamber of Commerce to find out the chambers role in entrepreneurship development within the Region. The major involvement of the Chambers in entrepreneurship development was to raise the awareness of their members through a business seminar or workshop on applied trade laws, policy and regulations in the Region
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and regularly inform members on new developments in the trade sector. Furthermore the chambers organize structured trainings on topics they consider relevant to the business community. The Bahir Dar Chamber of Comerce, for instance, provided training on accounting and record keeping and management to its members with the objective of improving their business. Entrepreneurship development in the Region has a gender dimension as well. Women entrepreneurs in the Region established an association with the objective of promoting womens entrepreneurship development. The association in collaboration with the Bureau of Trade and Industry of the Region has been providing business support services to its members. Entrepreneurship development encompasses not only the attainment of entrepreneurial skill through training, but it also addresses policy issues, power relations, improving access to and control over economic resources and opportunities. The association being aware of the importance of these elements strives to create a business environment conducive to women entrepreneurs in collaboration with local public organizations. As part of its business development service, the association provided training to 135 members on book keeping and recording. 7.1.2 Donor Support Activities
Donor support organizations are also providing business support services to promote entrepreneurship development in the Region. The Ethiopian Enterprise, which was originally established as a UNDP project, has been implementing entrepreneurial skill training programs in different regions of the country. The Enterprise conducted trainings on Entrepreneurship Development, which includes business plan preparation; business management etc. and financial and marketing management in Amhara Region. The training targeted potential entrepreneurs within the business community. It also conducted training programs designed to support or build up the capacity of government staff members who are directly involved in the development of entrepreneurship. Trainings such as Business Counseling and Time Management were among those designed as a component for capacity building of local government staffs.
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The European Union has established a Project Support Unit for Micro and Small Enterprise Development in Ethiopia having three major components related to: (i) capacity building of intermediary institutions involved in Micro and Small Enterprises development; (ii) business development services including information and (iii) financial support to Micro Finance Institutions. The overall objective of the project as stated in its project document was to bring a higher countrywide growth of micro and small enterprises by creating lasting favorable conditions for their development and facilitating their access to financial and business development services. The project operates in seven major urban areas in the country, Bahir Dar in Amhara Region being one of them. The business development service of the project delivers training to micro and small enterprises with growth potential and belonging to 10 selected clusters of enterprises. The training so far delivered in the seven urban areas covers six major topics, namely, (i) Entrepreneurship Development; (ii) Management; (iii) Marketing/Costing; (iv) Record Keeping; (v) Business Plan; and (vi) Taxation. Non-Government Organizations (NGOs) also contribute to entrepreneurship development in the country. Although many of them are engaged in development projects in areas where acute shortage of food and prevalence of disease and malnutrition remain to be chronic phenomena either due to natural or man-made disasters, their involvement appears to impact entrepreneurship development, though not in a direct way. For instance, SOS Sahel (UK), an international NGO has been engaged in apiculture development in Amhara Region. One of its tasks is to train beekeepers on modern beekeeping practices, with the aim of increasing their productivity, and to organize them into cooperatives so that target beekeepers soon turn out to be market-oriented producers. 7.2 Entrepreneurship Development Paradigm There is a pervasive tendency to associate entrepreneurship development with selfemployment among development workers and practitioners. In many developing countries self-employment appears to be dominant in the informal sector, but the majority are not entrepreneurs. Potential entrepreneurs display initiative and ambition, have business sense and foresight, and are decisive in risk taking. Entrepreneurship
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development program thus needs to focus on those potential entrepreneurs who fulfill such prerequisites and who display the potential for creating economic growth. Promising entrepreneurs should be nurtured and helped to serve as role models and mentors for their communities. Self-employed individuals from micro-enterprises should not be excluded to benefit from the program. The program, however, will have to focus on those individuals, whether they come from micro or small or medium enterprises, with innovative capacity and potential for growth and creating additional employment. A situation analysis and need assessment surveys must be launched to identify the existing potential, the entrepreneurial skill lacking, and the economic sectors with high opportunities for growth before the formulation of an entrepreneurship development program. The program eventually becomes effective if its formulation reflects the need of target beneficiaries and its overall goal contributes to private sector development. The task of undertaking entrepreneurship programs should not be left entirely to the sole responsibility of public organizations. In fact it is most often argued that public organizations have not proven themselves to be the most effective channel of support since they themselves are not entrepreneurial in approach and experience. Most donor communities, being aware of this type of shortcomings in public organizations, provide their support to entrepreneurship development through an independent, private sectorbased organizational structure. For example, the EU project for micro and small enterprise development in Ethiopia provides its business development service through recognized local consultants in entrepreneurship development. It is worth mentioning at this point that the EU project integrated its business development service (BDS) with a follow up scheme. The support provider should not be pleased at providing a single service. A follow up mechanism must be initiated to monitor whether the service provided bears fruits or the target trainee is making use of the entrepreneurial skill that s/he attained through the BDS training. In addition to setting up of a follow up mechanism, the business development service becomes even more effective when linked to finance and other services such as marketing, quality assurance and productivity improvement, depending on the need of the target trainees.
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7.3 Business Development Service (BDS) Needs in Amhara Region Business development service providers in Amhara Region and elsewhere in the country have paid little attention to the importance of undertaking need assessment survey. A need assessment survey as stated earlier would enable the service provider to effectively target and prioritize the type of services and the potential sector and clusters of enterprises to focus on during the preliminary stage of entrepreneurship development. The present practice seems to ignore the need of potential entrepreneurs, though the BDS training so far launched in different urban areas of the country, including those provided in Amhara Region appears appropriate from entrepreneurial skill development point of view. The financial position of many micro and small enterprises in the country has been rated to be weak by all standards. The BDS providers, in addition to the entrepreneurial skill training they regularly provide with the objective of enhancing the enterprises, access to markets and their capacity for taking advantage of market opportunities, need also to focus on developing strategies for improving MSEs access to sustainable sources of financial, business and other upgrading services needed to meet the demands of both domestic and export markets.
The task requires BDS providers to work in collaboration and with the assistance of the following major bilateral or multilateral donor organizations: The World Bank Private Sector Development; The USAID Micro Enterprise Innovation Project; The Inter-American Development Banks Micro-Enterprise Unit; The ILOs Enterprise and Cooperative Development Department; The International Finance Corporation etc.
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They are the best sources for technical assistance and their efforts, including those of the NGOs have produced a number of lessons learned and best practices being adopted in entrepreneurship development in developing countries. The International Labor Organization, for instance, has a management training program called Start and Improve Your Business (SIYB) with a focus on starting and improving small businesses as a strategy for creating more and better employment in developing economies and economies in transition. The long-term goal of the program is to contribute to economic growth in general and the creation of more and better jobs in micro and small enterprises in particular. Its short-term goal, on the other hand, is to strengthen local business development service providers to deliver business management training that will make it possible for micro and small scale entrepreneurs to start and improve their businesses thereby creating sustainable jobs for themselves and others8. The SIYB training interventions for entrepreneurs basically consist of four training packages: 1. Business idea generation training (GYBI), which targets potential microentrepreneurs who are eager to start their own business but lack a good business idea. 2. Business start-up training (SYB) - This one targets potential micro and small entrepreneurs who want to start their own business and already have a realistic business idea as well as those who have been running a business. The training assists entrepreneurs in developing their own business plan step by step by going through the following 10 steps: 1. Business Idea; 2. Marketing 3. Managing People; 4. Legal Responsibilities 5. Estimation of Sales Revenue 6. Start-up Capital 7. Setting Prices 8. Cash Flow Planning 9. Develop & Analyse Business Plan 10. Action Plan Starting Business
Source: www.ilo.org Employment- Job Creation and Enterprise Development. Development Studies Associates (DSA) & Shawel Consult International (SCI)
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3. Improve Your Business (IYB), which is for business owners and mangers who have been already running businesses and deals with business management concepts (marketing, business planning, record keeping, costing, stock control etc.) in a more detailed manner than SYB by applying a modular approach based on the training need of the business owner.
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4. Expand Your Business (EYB) This is for growth-oriented enterprises that have been well established for many years and now wish to expand business operations, yet do not know quite how. The EYB focuses on more advanced management training (Financial management, sales and marketing management, strategic management, human resource management and export links). The Micro and Small Enterprise Agency or the Bureau of Trade Industry of the Amhara Region will have, through the procedure followed by government in accessing the technical assistance of bilateral or multilateral organizations, to work out mechanisms on how to get assistance from the sources mentioned above to increase and strengthen its effort and that of other BDS providers in the Region in Entrepreneurship Development activities.
8 RECOMMENDATIONS
The concerned local authorities must think of expanding and establishing market facilities and infrastructure to accommodate the ever increasing trade operators and all other actors in the major market places of the Region.
There are reported cases of product adulteration. Some marketable agricultural products are adulterated with foreign matters. Concrete information is not available where the adulteration process begins. The producers and trade operators need to be aware of the danger of product adulteration. The extension workers of the Bureau of Agriculture of the region need to be engaged in awareness creation activities as a first step to minimize the danger. Legal action then follows on those who persist to practice unfair trade in the Region.
The local governments effort to promote the development of some cash crops like coffee and flower for export must be continued at greater impetus, because Ethiopia has a good market position in the world trade of coffee; and flower appears to have good world market demand and the country is just beginning to penetrate this market and appears promising.
The export earning of the country from export of live animals has continued increasing since the year 2002, despite increasing reported illegal trade in the Eastern part of the country and to the Sudan from Amhara Region. The Amhara Region, being the second largest in livestock population in the country, needs to device mechanisms to stop the illegal trade and to benefit from the export of live animals.
The world market demand for honey and beeswax has recently shown some improvement. Ethiopias market position in the world market especially for beeswax has been noted to be encouraging and ranked second from Africa, with much better quality even than Tanzania, which ranks first in terms of volume of export. The Amhara Region must act to grasp this market opportunity and needs to assist beekeepers and organizations that work towards the development of
apiculture in the Region like the SOS Sahel UK in order to boost the production of beeswax and honey, maintaining the quality the world market requires. The export market for natural gum is also reported to be increasing in general. Quite a substantial portion of the export is believed to originate from Amhara Region. Some studies also indicated that the Region has a very good potential in natural gum production but not exploited as expected. The Region, therefore, needs to conduct detailed feasibility study to exploit its natural gum resources by giving due attention to avoid depletion of resources as it takes several years to regenerate. Maize and sorghum took the major share in the total export of cereals. The volume exported depends much on the volume of production and was found to fluctuate from year to year. These crops and others in the cereal group are highly needed for domestic consumption as well. The Amhara Region is not selfsufficient in food crops. There are at present over 2 million people needing food aid estimated at nearly 320,000 tons per year in the Region 9. for the domestic market instead of targeting to the export market. The capacity of private sector-based organizations or associations such as the Amhara Women Entrepreneurs Association, the chambers of commerce, which provide Business Development Service (BDS), need to be strengthened to run and implement innovative and cost effective entrepreneurship development programs. BDS providers are expected to be development-oriented and have operational autonomy, good business connections and flexibility for promotional, fund-raising and coordination tasks. The concerned office in the Region in collaboration with BDS providers and relevant donor communities must conduct need assessment survey to identify the potential sectors/enterprises and target groups that have some of the key prerequisites for entrepreneurial success in order to be able to formulate and design effective Entrepreneurship Development Programs.
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The Region,
therefore, needs to devise a scheme to increase the production of these crops more
Source: Office of Food Security Program Coordination and Disaster Preparedness, Amhara Regional Office
To break the long distribution channel that exists in the agricultural market of the Region, the market infrastructure especially rural road networks, warehousing facilities and organizing producers into cooperative associations must be pursued. These measures would enable producers to supply the market agricultural products in commercial volume.

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Amhara National Regional State (ANRS)

Development Studies Associates (DSA) & Shawel Consult International (SCI)

Development Studies Associates (DSA) & Shawel Consult International (SCI)

Development Studies Associates (DSA) & Shawel Consult International (SCI)

Amhara National Regional State (ANRS)

Development Studies Associates (DSA) & Shawel Consult International (SCI)

Amhara National Regional State (ANRS)

Development Studies Associates (DSA) & Shawel Consult International (SCI)

Amhara National Regional State (ANRS)

Amhara National Regional State (ANRS)

Development Studies Associates (DSA) & Shawel Consult International (SCI)

Amhara National Regional State (ANRS)

Development Studies Associates (DSA) & Shawel Consult International (SCI)

Amhara National Regional State (ANRS)

Amhara National Regional State (ANRS)

Amhara National Regional State (ANRS)

1999/2000 Survey 1995/96 Survey

Income Interval in Birr

Size and Types of Trade Operators

Amhara National Regional State (ANRS)

2001/02 1380 15823 6720 4132 42 28097

2002/03 1779 18325 7842 4273 87 32306

2004/05 2572 28825 8969 7472 165 48003

Source: Bureau of Trade and Industry, Amhara Regional State

Agriculture 0% Industry 15%

Service Trade 18%

Retail Trade 59%

Amhara National Regional State (ANRS)

Agricultural Products Marketing in the Region

Amhara National Regional State (ANRS)

Amhara National Regional State (ANRS)

Development Studies Associates (DSA) & Shawel Consult International (SCI)

Amhara National Regional State (ANRS)

P roduction other Regions

Market Supply Amhara

3.3 Agricultural Product Market Structure

Development Studies Associates (DSA) & Shawel Consult International (SCI)

Amhara National Regional State (ANRS)

Assemblers or village collectors

Farmers' co-operative organizations

Export market Retailers (incl. supermarkets, open-air markets)

Development Studies Associates (DSA) & Shawel Consult International (SCI)

Amhara National Regional State (ANRS)

Development Studies Associates (DSA) & Shawel Consult International (SCI)

Amhara National Regional State (ANRS)

Development Studies Associates (DSA) & Shawel Consult International (SCI)

Amhara National Regional State (ANRS)

Development Studies Associates (DSA) & Shawel Consult International (SCI)

Amhara National Regional State (ANRS)

Figure 5: Market Trends of Major Crops in Amhara Region

2,500 2,000 1,500 1,000 500 0

Cereals Pulses Oilseeds

Amhara National Regional State (ANRS)

Development Studies Associates (DSA) & Shawel Consult International (SCI)

Amhara National Regional State (ANRS)

400,830 294,341 37,822

476,277 323,881 38,423

351,614 246,732 20,749 2,928 27,241 53,963

33,494 56,385 24,094

443,651 317,348 14,819 2,658 5,765 37,178 25,854 40,029

466,483 336,784 15,355 9,075 35,733 40,507 29,029

567,245 440,099 19,085 71 15,903 38,358 25,854 27,875

Development Studies Associates (DSA) & Shawel Consult International (SCI)