Africa-Press-Ethiopia Earlier last week, the National Bank of Ethiopia (NBE) issued a new directive, amending an earlier directive in use since October 2020. The NBE explained that the new directive would enable it to carefully manage its scarce reserve foreign exchange and ensure its efficient and proper allocation. The directive also laid out foreign exchange allocations and priorities in Three categories.
The national bank in the amended directive indicated that there is a need to ensure foreign exchange is allocated in a transparent and sound manner to priority and other economic sectors without opening a room for rent seeking behavior and malpractice. The NBE through its newly amended directive titled “Transparency in Foreign Currency Allocation and Foreign Exchange Management” , also identified as directives No. FXD/77/2021 is issued repealing its predecessor directive No. FXD/67/2020 has similarly categorized which sectors the banks should prioritize when it comes to allocation of foreign exchange for import items.
This directive, which includes practices similar to previous directives, sets out the details that bank board directors and executives need to implement while allocation of foreign exchange. Like the former, this directive states that the allocation of foreign currency by a bank shall give priority for three categories. However, it has amended and reshuffled the priority listings within the categories where import items and payments are to be served on a first come first served basis.
The new directive put as a first priority comprises pharmaceuticals; like medicine, inputs for manufacturing of pharmaceuticals and laboratory reagents, while it has newly inserted inputs for manufacturing of edible oil, that has not been listed in any of three priorities previously is now set in the first category of the priorities in the new directive along with liquefied petroleum gas (LPG).
As a second priority it put inputs for agriculture and inputs for manufacturing including fertilizer, Seed, Pesticide and Chemicals. Its third priority arrays broader spectrum of listings including motor oil and lubricants; agricultural inputs and machineries; pharmaceutical products; manufacturing industries requests for procurement of machineries, equipment, spare parts, and accessories; import of nutritious food for babies; spare part for construction machineries for own use construction companies whose total values not exceeding USD 50,000 and educational materials. Profit and dividend transfer; transfer of excess sales of foreign airlines and sales from share and liquidation of companies by FDI are also to be prioritized under this category, the new directive implies.
