Ethiopia has exported more than $570 million worth of coffee in the past six months, recognizing Somaliland's independence to acquire ports

Recently, the Ethiopian Coffee and Tea Authority (ECTA) said that Ethiopia exported 117955 tons of coffee to the international market in the first half of fiscal year 2023.

It is reported that the main destinations for Ethiopian coffee exports are Saudi Arabia, South Korea, the United States, Germany, Japan and China. While Ethiopia is currently working to increase coffee exports and revenues, authorities say the uncertainty in the global coffee market and ongoing conflicts in coffee-importing countries pose challenges. In Ethiopia's last fiscal year 2022 Compact 23, the country earned US $1.3 billion from exports of about 240000 tons of coffee. Compared with direct finance, export earnings fell significantly, as Ethiopia's previous export earnings from about 300000 tons of coffee reached a record $1.4 billion.

However, the increase in coffee exports is mainly due to the civil war in Ethiopia, which reached a peace agreement in 2022, but the continuing riots still have an impact on the country. Coffee, which accounts for 30 to 35 per cent of Ethiopia's export earnings, is a major trading commodity and a major source of foreign exchange earnings. Since the Ethiopian government needs foreign currency (US dollars) to buy weapons, it chooses to get more US dollars from coffee exports.

However, Ethiopia is also fretting about exports, all because Eritrea became independent from Ethiopia in 1993 and Ethiopia lost its coastal territory and became a landlocked country. And after the border war between the two countries from 1998 to 2000, the border was closed, so Ethiopia lost its long-used port of Assab and had to borrow the port of another neighboring Djibouti. Ports are very important to Ethiopia because it accounts for 95 per cent of the country's foreign trade, and the country's economy cannot do without exports of agricultural products and minerals, especially coffee, which accounts for 1/4 of export earnings, and relies on imports of important industrial products such as oil. Therefore, only one port can not meet the needs of the country.

As a result, the Prime Minister of Ethiopia recently signed a memorandum of understanding with the leaders of the local government of Somaliland in northern Somalia, whereby Ethiopia will be granted the right to use the Somaliland port, increase Ethiopia's exports and earn more revenue, while recognizing Somaliland as an independent country in the future. It is understood that the Berbera leased in the agreement is the only large port in Somaliland, with an annual throughput of 500000 standard containers, and is being fully modernized with the investment of British International Investment and Dubai Global Port Group. Moreover, Ethiopia can get the right to use it for 50 years, which can increase the foreign exchange earnings of products such as coffee and minerals.