The Ethiopian government has revoked the Franco Valuta import scheme just two months after its introduction. The Ministry of Finance informed the Ethiopian Customs Commission and the National Bank of Ethiopia (NBE) that the scheme had fulfilled its purpose and would be discontinued. Importers have two weeks to complete ongoing transactions, after which no new permits will be issued.
The scheme, designed to address inflation and foreign exchange shortages, allowed businesses with foreign currency to import essential goods like edible oil, sugar, and flour without relying on local banks. It reduced delays caused by banks struggling to issue letters of credit.
However, concerns arose after Prime Minister Abiy Ahmed accused some individuals and companies of using the scheme for illicit activities, including gold smuggling. With banks now mobilizing sufficient foreign currency, the government has decided to shift back to a more sustainable system, placing currency provision responsibilities with commercial banks.
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