EMF (27 August 2008) The Meles regime has refused to issue letters of credit (LC) to all importers due to lack of foreign exchange, EMF sources said. LC is the system to draw funds from government-held foreign exchange accounts allowing them to import goods from foreign lands.
The main reason for the prohibition, according to sources, is the lack of foreign currency in the country’s commercial banks, resulting a total freeze of import commodities by small scale companies.
Commercial banks were authorized to facilitate imports and provide associated services such as LC and External Loans (Franco Valuta) against submission of the required documents by any importer.
The Ethiopian economy in the last six years was characterized by price hikes, supply shocks and declining GDP per capita.
Economists say the regime’s claim of 10% economic growth on the basis of questionable data, presented an unreliable picture of the actual Ethiopian economy. The economic situation is so worst that many wonder how the Ethiopian people could have physically survived the recent economic crisis.
Some observers say that the refusal of LC has also another reason. They say it is aimed at monopolizing the import business by TPLF’s owened companies and expel small scale private companies out of the import.
Import of goods and commodities are now undertaken by Meles Zenawi’s party affiliated huge companies.