Customs valuation has long stood at the centre of Ethiopia’s trade, investment, and foreign exchange challenges. While revenue protection and foreign currency control remain legitimate state objectives, the persistent reliance on arbitrary reference prices—particularly under Customs Valuation Directive No. 158/2011—has created serious distortions in trade administration, banking operations, and domestic taxation. The recent circular issued by the National Bank of Ethiopia on January 26, 2026, requiring banks to use customs prices as a reference for Letters of Credit, has once again brought this debate to the forefront, exposing the far-reaching consequences of valuation practices that diverge from internationally accepted principles.
Ethiopia’s Customs Valuation Reform: Bridging the Gap Between Directive and Practice
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