Ethiopia’s emerging automobile market has hit a rough patch as the government has imposed unexpected restrictions on the importation of vehicles. The Ethiopian Customs Commission recently introduced a new regulation that eliminates a longstanding exemption allowing Ethiopian citizens returning permanently from abroad to bring their vehicles into the country.
In the mere two weeks since this announcement, vehicle prices have soared to unprecedented levels, causing dealerships to scramble to adapt to these sudden and drastic changes. The unforeseen consequences of this importation ban have essentially halted the car market, leaving both sellers and buyers uncertain about what the future holds.
“Many car dealerships are now being compelled to close down their businesses as they attempt to sell off their existing inventory at inflated prices, hoping for a more promising future in the weeks or months ahead,” explained Abenet Kernesa, a car sales agent.
In the face of limited options, especially after the central bank prohibited the use of foreign exchange reserves for the importation of 38 items last October, the automotive sector had heavily relied on special permits granted to returning citizens to import vehicles. These permits had been a crucial lifeline for importers who were struggling to source vehicles from overseas in the wake of the currency ban, as per insights from industry experts.