Ethiopia: macroeconomic and trade profile - Opportunities and challenges towards implementation of the AfCFTA

In response, in 2018 the new Ethiopian government started its Homegrown Economic Reform, with the aims of increasing the government’s efficiency, liberalising the economy and opening the country to foreign firms. [...] Figure 3 gives a breakdown of the average unit production costs of a jacket in Ethiopia with and without AGOA tariffs and different scenarios to compensate the loss of competitive advantage because of the suspension of Ethiopia from AGOA. [...] The intensification of the conflict in northern Ethiopia since November 2020 has added difficulties to the business environment, and the impact of the ceasefire announcement in November 2022 is yet to be seen.13 Meanwhile, the impact of AGOA sanctions is mostly visible in the garment sector. [...] Ethiopia participated in the ceremonial trade activity on the date of coming into effect of the agreement on 1 January 2021 by transporting trophies to various African countries under the AfCFTA, via the partnership between Ethiopian Airlines–DHL and the African Electronic Trade Group (AETG, 2021). [...] COMESA has been helping with the conclusion of outstanding matters to support the operationalisation of the AfCFTA, such as the framework agreement on the division of labour and roles between the AfCFTA Secretariat and the AUC on the one hand and the Regional Economic Communities (RECs) and Member States on the other hand (COMESA, 2022a).