The ECTA and UNIDO are set to start a new coffee project.
The United Nations Industrial Development Organization (UNIDO) has been one of the most active partners in the Ethiopian coffee sector through various projects, with the Coffee Training Center being the most famous one.
This week, the ECTA and UNIDO announced a project implementation agreement following the earlier signed agreement between the Ministry of Agriculture and UNIDO. The project entails the release of low-interest loans to increase quantity and quality, contributing to price improvements. According to the authority, a total of 10 million euros will be released to support coffee farmers, processing stations, and suppliers for a duration of 3 years. The project is also expected to address social issues such as better women's involvement in the coffee industry and enhanced processing practices in its environmental cluster.
MOF in coffee trade follow-ups.
It is to be recalled that the Ministry of Finance has set directives on collecting VAT on locally traded coffee for export preparation. Despite over six months passing since its introduction, however, its application has not been effective. This week, MOF announced the directive will be practical starting with the new Ethiopian fiscal year (July 8, 2023–July 7, 2024).
The new directive dictates that exporters will be purchasing coffee with 15% added to its original price, putting exporters on capital tie-ups. Its implementation requires exporters to surrender an additional 15% on all of their purchases, which will later be refunded upon presentation of export documents. This has raised complaints and uncertainties from the majority of exporters, who question the efficiency of the regional and federal revenue bureaus. This is expected to contribute to the perpetuation of high export prices, as the majority of exporters agree.
Source: MOF
