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The informal cross-border livestock trade is costing
the Ethiopian government about 138 million dollars
in lost taxes each year, or about three times the
revenue currently collected by taxing the formal
livestock trade, according officials from the
Ministry of Agricultural and Rural Development.
Officials released the figure at a panel discussion
held at the Hilton Addis organised by the Addis
Abeba Chamber of Commerce and Sectorial Association
(AACCSA) and the United Nations Office for the
Coordination of Humanitarian Affairs (UN OCHA).
The figure underscores the untapped potential of
Ethiopia’s livestock trade. Ethiopia has the largest
livestock population in Africa and 10th largest
in the world. The country’s livestock exports
constitute 33pc of the agricultural Gross Domestic
Product (GDP) and 16pc of the Gross National Product
(GNP).
Yet much of the trade, often destined for markets in
Kenya and the Middle East, is conducted informally.
Traders complain that they cannot make a living
unless they conduct their trade illegally due to the
cost and inefficiencies of current systems of
taxation and licensing. Attempts to curtail the
informal trade by closing border crossings, however,
has done little except damage local economies.
Meanwhile, the value of Ethiopia’s livestock and
meat exports has at times been hurt by poor quality.
“The major setback in the Ethiopian livestock trade
is the poor quality of our exports,” said Tesfalidet
Hagos, owner of Luna Export Abbattoirs. “ Our
pastoralists rather focus on quantity rather than
quality.”
According to Hagos, whose slaughterhouse is located
in Modjo town, 73Km south east of Addis Abeba, there
are very few factories that produce animal feed for
the huge number of livestock in the country,
compromising the quality of the livestock,
especially when pastures are poor.
Another factor hurting export quality is the lack of
accessible animal veterinary services in rural
areas, especially for pastoralists, mobile livestock
herders. There are between 12-15 million
pastoralists and agro-pastoralist in the country,
which accounts for about 20pc of the total
population.
Deginet Yimenu (DVM), national coordinator of
African transmitted diseases control at the MoARD
told Fortune that there is a work by the
government to improve quality by providing
inspection services in the area where the
pastoralists live so that vaccines would be
distributed in the future.
Pastoralist areas are still overwhelmingly poor.
Investment in social services is still alarmingly
low and key economic indicators lag well behind the
rest of the regions. Nevertheless, public and
private investment in these areas could unlock
significant potential for economic growth in the
livestock trade and related industries such as hides
and dairy products.
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