(Center for International Development at Harvard University, 2022-11) Hausmann, Ricardo; O’Brien, Tim; Cheston, Timothy; Taniparti, Nikita; Hassen, Ibrahim; Soylu, Can; Lamby, Lucas; Neumeyer, Pablo
Ethiopia suffers from a chronic shortage of foreign exchange (forex). The resulting lack of access to imports prevents firms from accessing imported inputs required for production. This creates a vicious cycle as exporters are constrained by this same problem, which further reduces overall supply of foreign exchange in the Ethiopian economy. The inability to reliably access foreign exchange for imports affects firm decisions on sourcing, capacity, and output. While the cost of this constraint is known to be high on the Ethiopian economy and firms are known to use a range of measures to attempt to bypass this constraint, quantitative assessments of the problem and response actions by firms are limited. It is in this context that an importer survey was conducted with the goal of informing policy decisions. A total of 202 firms with an active importing license were interviewed in March-April 2022. These firms were randomly sampled from firms registered with an importer license.
