The Ministry of Trade has announced all khat exporters must obtain new licenses by November 25th in a bid to reverse falling revenues from the cash crop.
Once among Ethiopia's top five export earners, khat generated over $400 million a decade ago but only $248 million last year. In addition to declining sales, Ethiopia has faced stiff competition from neighboring Kenya in export markets like Somalia and Somaliland over the past year.
The new licensing measures come amid disputes over regional authorities issuing licenses and collecting tariffs independently. The federal government has long opposed such practices, saying it exceeds the mandate of regional administrations. The new rules are aimed at consolidating licensing and oversight under the Ministry of Trade.
In a statement on November 7th, the ministry said improvements are needed to boost incomes from the sector. As a result, it has introduced new pre-license qualification criteria and registration procedures requiring universal relicensing of both existing and prospective khat export businesses. Exporters will have till November 25th to confirm compliance with the fresh standards.
"The goal is to better structure the trade to benefit farmers, ensure proper foreign exchange inflows, curb illegal trade and support licensed operations," Gebremesekel Chala, Minister of Trade, said at the ministry's premises. Failing to complete relicensing within the deadline will revoke export rights.
By mandating relicensing, the ministry seeks to overhaul management of the entire khat export sector amid falling revenues and regional disputes over independent licensing activities.