Ethiopia’s khat export industry is facing a significant decline in revenue, according to Kassahun Gofe, Minister of Trade and Regional Integration. Speaking in response to questions from Members of Parliament, Kassahun outlined several factors contributing to this downturn, emphasizing efforts to balance farmers’ incomes, foreign currency generation, and regional tax revenue growth.
One major shift occurred in October 2022, when Ethiopian regional states began implementing taxes on khat, aiming to increase revenue through measures such as checkpoints. Kassahun also pointed to Somalia’s decision to permit imports of cheaper Kenyan khat as a critical factor negatively affecting Ethiopia’s export earnings.
Khat has long been a cornerstone of economic livelihood for communities in eastern Ethiopia and previously ranked as the country’s second-largest foreign currency earner. Kassahun highlighted the need for a strategic response to these challenges to sustain the vital contributions of the khat trade to Ethiopia’s economy.
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