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The recent European Business Organizations (EBO) Conference held in Brussels from June 3 to 7, 2024 showcased a robust gathering of global business leaders focused on navigating complex economic challenges and opportunities. Hosted by Jason Collins, Chair of EBO Global, the event drew record attendance, underscoring its growing influence with 54 member organizations worldwide.

Key discussions revolved around pivotal themes including the rise of Africa as a trade priority, the implications of the EU’s Carbon Border Adjustment Mechanism (CBAM), and strategic responses to the evolving US-China trade dynamics.

With Africa witnessing the fastest membership growth, discussions highlighted its strategic importance due to rich natural resources and burgeoning population. Member nations emphasized the need for balanced partnerships that foster sustainable growth across the continent. EBO Ethiopia raised the foreseeable challenges in relation with the implementation of EU Deforestation Regulation in the coffee value chain that will impact more than 5 million small holder farmers across the country.

Central to deliberations was the EU’s commitment to the Green Economy, with stringent CBAM regulations aimed at ensuring global exporters meet EU environmental standards. Concerns were raised regarding the potential cost burdens for businesses, including SMEs, navigating supply chain complexities.

Amidst escalating US-China trade tensions, participants explored the EU’s approach to de-risking its exposure to China, emphasizing adherence to WTO rules and advocating for fair global trade practices. This approach aims to balance economic growth with environmental stewardship.

While the conference focused on economic strategies, including critical raw material partnerships and digital investments, it also addressed geopolitical uncertainties such as the Ukraine conflict and implications for EU policies.

Overall, the conference provided a platform for proactive dialogue and strategic planning among global business leaders, reinforcing EBO’s pivotal role in shaping international trade policies and fostering economic resilience.

For more information, visit EBO Worldwide Network.

After nearly half a century, Ethiopia announced that it is inviting foreign investors back into its trading sector. This landmark decision, announced in April 2024, signals a move away from the country’s previous strategy of shielding domestic businesses. The upcoming reforms were discussed during the European Chamber’s monthly CEO networking event that took place on May 16, 2024. Members of the European Chamber had the opportunity to discuss the directive and get some more insights from H.E. Hanna Arayaselassie, member of the Ethiopian Investment Board and Commissioner of the Ethiopian Investment Commission (EIC), who was the guest speaker at the event.

The Commissioner explained that the Ethiopian Investment Board meticulously planned this reform. Their comprehensive study examined the experiences of other nations and evaluated the rationale behind Ethiopia’s long-standing protectionist trade policies. For decades, the Ethiopian government prioritized nurturing domestic wealth creation. The aim was to allow sheltered domestic companies to mature and eventually integrate with the global market. However, this limited competition disincentivized domestic businesses from venturing into higher-value activities like manufacturing. The government acknowledged the shortcomings of the previous approach. The closed system fostered significant challenges, including informality and illegal practices within the wholesale, retail, import, and export sectors. The new policy aims to address these issues by introducing foreign investment.

The Ethiopian government anticipates a series of positive outcomes from this reform. Increased competition in the trade sector is expected to benefit various stakeholders. Foreign suppliers will gain access to improved networks for distributing their products. Consumers are likely to experience lower prices due to increased competition. Additionally, by formalizing previously informal businesses, the government anticipates a rise in tax revenue. 

This move towards a more market-driven economy extends beyond the trade sector. The government has signaled its intention to further liberalize the logistics sector, underscoring a broader commitment to attracting foreign investment and fostering private sector participation. This reform has the potential to unlock significant economic growth for Ethiopia in the years to come. Previously restricted commodities like coffee, pulses, and oilseeds are now open for export by foreign investors. However, safeguards are in place. Companies with no prior Ethiopian sourcing experience must secure a minimum export transaction within their first licensing year, ensuring established business practices and a commitment to Ethiopian produce.

A significant shift is the opening of the import sector to foreign investors, excluding fertilizers. To participate, companies must either be manufacturers or act as authorized agents. Alternatively, a minimum import threshold has been established for the first year, catering to those without established Ethiopian partnerships.

The wholesale sector is now largely open, with investors only needing a standard contract. However, demonstrating a robust logistics infrastructure within Ethiopia is an additional requirement, ensuring efficient movement of goods. Foreign entry into the retail sector is permitted, but with limitations to protect smaller domestic retailers. These limitations likely involve minimum store size requirements, ensuring a level playing field.

The Ethiopian Investment Commission, responsible for issuing licenses, will prioritize applicants with proven experience and the capability to achieve the directive’s goals. Investors will also be expected to enter into detailed agreements, ensuring compliance with these goals. This directive represents a significant shift for Ethiopia, aiming to attract foreign investment and stimulate economic growth. By opening key sectors while implementing safeguards, the government seeks a balance between fostering development and protecting domestic interests.

The government has outlined a measured approach to liberalizing the trading sector, prioritizing controlled experimentation over immediate, sweeping reforms. This phased introduction reflects a desire to both unlock economic potential and ensure a smooth transition for all stakeholders.

Ethiopia’s rich coffee industry, predominantly fueled by the toil of over 5.8 million smallholder farmers, now faces a looming threat as the European Union’s Deforestation Regulation (EUDR) takes effect. This regulation, aimed at combating global deforestation, lays down stringent diligence requirements for commodities like coffee.
Introduced on June 29, 2023, the EUDR compels companies dealing in specified commodities to ensure their products are free from the taint of post-2020 deforestation or breaches of environmental laws. Non- compliant goods will face exclusion from the EU market starting December 30, 2024. Such a scenario poses a significant risk to Ethiopia’s coffee exports, which contribute a substantial 35% to its total export revenue.
In response, collaborative endeavors involving the European Chamber in Ethiopia (EuroCham), the EU Green Deal project team, and local stakeholders have been initiated to grapple with the implications of the EUDR. However, lingering concerns persist, particularly regarding the practicality of compliance for smallholder farmers.
A recent round table discussion hosted by EuroCham and European Coffee Buyers shed light on the mounting apprehensions among international buyers. The harsh penalties for non-compliance, which could amount to at least 4% of EU turnover, have served as a deterrent for importers contemplating engagement with Ethiopian exporters.
The hurdles in implementing the EUDR are multifaceted, with one of the significant challenges being the complexity of tracing coffee origins across Ethiopia’s extensive smallholder farming landscape. Though the Ethiopian government has put forth a compliance action plan, encompassing geo-location data collection, the feasibility of such measures remains uncertain.
Furthermore, the EUDR fails to provide adequate incentives for smallholder farmers, potentially driving them towards deforestation in pursuit of more lucrative crops, thus negating the regulation’s environmental objectives.
As discussions continue, the imminent threat to the livelihoods of Ethiopian coffee farmers underscores the urgent need for comprehensive solutions. Striking a balance between environmental conservation and the socioeconomic realities of coffee-producing communities is imperative in navigating these challenging times.
In light of this, calls for strategic foresightedness from the Ethiopian Coffee and Tea Authority in addressing the compliance challenge for the over 5.9 million smallholder farmers are becoming increasingly urgent. The time to act is now to safeguard the future of Ethiopia’s renowned coffee industry.
Bahru Temesgen/EuroCham

EIMA International’s 46th edition was officially presented in Addis Ababa, signifying a milestone in Italy-Ethiopia agricultural cooperation. Riccardo Zucconi and Fabio Ricci emphasized Italy’s role as Ethiopia’s major supplier of agricultural machinery and the potential for further collaboration.
Zucconi stressed the need for mechanization in Ethiopian agriculture, highlighting Italy’s commitment to supporting local enterprises. Ricci expressed optimism about bilateral trade growth despite projected declines in exports.

The upcoming EIMA International in Bologna from November 6 to 10 is crucial for fostering cooperation. With over 50,000 models of machines, it offers cutting-edge solutions for Ethiopian agriculture. The Idrotech showcase features irrigation technologies crucial for sustainability.

Attendees include an Ethiopian delegation facilitated by the ICE Agency, promoting collaboration. Beyond exhibitions, EIMA offers diverse programs, including demonstrations of machinery for bioenergy and highly automated systems in agriculture.

For more details, click here.