Ethiopia is losing $50 to 78 billion in five years through trade mis-invoicing practices, one of tools to execute illicit financial flows.
Export under-invoice and import over-invoicing are the common activities in the illicit financial flows.
Amin Abdela, a Macroeconomist referred Adugna Lemi (Prof.) survey to proof his argument and said, “Ethiopia is losing $50 to $78 billion in five years due to trade mis-invoicing.”
Illicit trade activities in this regard include illegal flow of finance, commodities and services.
Amin was one of the panelists during the discussion titled “Illicit Trade and its Impact on Competitiveness of Local Companies” which was hosted by Addis Abeba Chamber of Commerce and Sectorial Associations (AACCSA) on Wednesday.
The panel was held at Hilton Hotel as part of the Chamber’s 75-years anniversary.
“There are hidden informal activities in the formal sector that increase illegal financial deeds,” Amin said.
“There’re partners in crime locally that expedite illegal trade misinvoicing practices,” Amin said, adding, “All sectors are impacted by the illicit trade activities.”
Ethiopia is also suffering from illicit financial flows. The capital flight from Ethiopia is very high, according to Amin.
He mentioned a dollar transaction at the parallel market which ranges from 82 to 100 Birr in a dollar is affecting the purchasing power of Ethiopia’s Birr.
The country has been affected by contraband trade across border areas.
Corrupted officials at borders contributed to the expansion of illegal financial flows and trade, Mussie Mindaye, Trade Relations and Negotiations Directorate General at the Ministry of Trade and Regional Integration, says.
Mussie raises the absence of a comprehensive trade deals with neighbors and poor border management as contributing factors to the booming illegal trade in border areas.
Ethiopia vast borderland makes construction of infrastructures across the border expensive and cumbersome task, according to Mussie.