Despite growing interest for bilateral cooperation, the volume of trade between Ethiopia and Russia has been declining from 2018 to 2020, according to the data from the Federal Customs Service of Russia.
The total trade turnover between the two countries in 2020 amounted to approximately $65 million. This represents a decrease compared to previous years, as the trade volume was around $90 million in 2019 and $120 million in 2018. However, both countries have been frequently expressing a desire to strengthen their economic ties and explore new opportunities for cooperation.
Exports from Ethiopia to Russia
Ethiopia primarily exports agricultural products, including coffee, tea, spices, oilseeds, and flowers to Russia. These products have gained popularity among Russian consumers due to their quality and unique characteristics. Additionally, Ethiopia also exports leather products, textiles, and handicrafts to the Russian market.
The major commodities that Ethiopia exports to Russia can be categorized into several sectors, including agricultural products, minerals, and textiles.
Agricultural Products
Ethiopia is renowned for its diverse range of agricultural products, which are highly sought after in international markets. Some of the major agricultural commodities exported from Ethiopia to Russia include:
1. Coffee: Ethiopia is one of the largest producers and exporters of coffee globally. Ethiopian coffee is highly regarded for its unique flavors and high quality. It is exported to various countries, including Russia, where it is consumed and enjoyed by coffee enthusiasts.
2. Oilseeds: Ethiopia is a significant exporter of oilseeds such as sesame seeds and linseeds (flaxseeds). These oilseeds are used in various industries, including food processing and cosmetics. Russia imports a considerable amount of oilseeds from Ethiopia.
3. Pulses:Pulses, such as lentils, chickpeas, and beans, are also major commodities exported from Ethiopia to Russia. These pulses are used in various cuisines and are valued for their nutritional content.
Minerals
Ethiopia possesses abundant mineral resources, and some of these minerals are exported to Russia. The major mineral commodities exported from Ethiopia to Russia include:
1. Gemstones: Ethiopia is known for its production of high-quality gemstones such as opals, emeralds, sapphires, and garnets. These gemstones are highly valued in the international market, including Russia’s jewelry industry.
2. Tantalum: Ethiopia has significant reserves of tantalum, a valuable mineral used in the production of electronic devices such as smartphones and computers. Russia imports tantalum from Ethiopia to meet its industrial needs.
3. Marble: Ethiopia has vast marble deposits that are exported to various countries, including Russia. Ethiopian marble is known for its unique patterns and colors, making it popular in the construction and interior design industries.
Textiles
Ethiopia’s textile industry has been growing rapidly in recent years, and the country exports textiles and garments to several countries, including Russia. The major textile commodities exported from Ethiopia to Russia include:
1. Cotton Products: Ethiopia produces high-quality cotton, which is used in the production of textiles and garments. Cotton products such as yarn, fabrics, and finished garments are exported to Russia.
2. Leather Products: Ethiopia is known for its leather industry, producing a wide range of leather products such as shoes, bags, and accessories. These leather products are exported to various countries, including Russia.
3. Handwoven Fabrics: Ethiopia has a rich tradition of handwoven fabrics, including traditional Ethiopian clothing called “habesha kemis” or “shemma.” These handwoven fabrics are exported to Russia, where they are valued for their craftsmanship and cultural significance.
Imports from Russia to Ethiopia
Russia exports a variety of commodities to Ethiopia. These commodities play a significant role in bilateral trade between the two countries. Some of the major commodities that Russia exports to Ethiopia include:
1. Machinery and Equipment: Russia is known for its expertise in manufacturing machinery and equipment. It exports a range of industrial machinery, including construction equipment, agricultural machinery, and mining equipment, to Ethiopia. These machines are essential for various sectors of the Ethiopian economy, such as construction, agriculture, and mining.
2. Chemicals: Russia also exports chemicals to Ethiopia. This includes fertilizers, pharmaceuticals, and various types of industrial chemicals. Fertilizers are particularly important for Ethiopia’s agricultural sector as they help enhance crop productivity. Pharmaceutical products from Russia contribute to Ethiopia’s healthcare industry.
3. Metals and Minerals: Russia is rich in natural resources, including metals and minerals. It exports metals such as steel, aluminum, and copper to Ethiopia. These metals are used in various industries, including construction, manufacturing, and infrastructure development. Additionally, Russia exports minerals like coal and iron ore to Ethiopia.
4. Energy Products: Russia is one of the world’s largest producers of oil and gas. It exports petroleum products to Ethiopia, which are crucial for the country’s energy needs. These products include crude oil, refined petroleum products like gasoline and diesel fuel, as well as liquefied natural gas (LNG).
5. Food Products: Russia also exports food products to Ethiopia. This includes items like wheat, barley, sunflower oil, and dairy products. These food products contribute to Ethiopia’s domestic consumption and help meet the demand for certain agricultural commodities.
6. Vehicles: Russia exports vehicles to Ethiopia, including cars, trucks, and buses. These vehicles are used for transportation purposes across the country.
7. Textiles: Russia exports textiles and clothing items to Ethiopia. This includes fabrics, garments, and accessories. These products contribute to Ethiopia’s textile and apparel industry.
8. Electronics: Russia exports electronic goods to Ethiopia, including consumer electronics, telecommunications equipment, and electrical components. These products are essential for Ethiopia’s growing technology sector.
9. Military Equipment: Russia is a major exporter of military equipment and weapons. It exports defense-related products to Ethiopia, including firearms, ammunition, and military vehicles.
10. Miscellaneous Products: Apart from the above-mentioned commodities, Russia also exports various other products to Ethiopia. This includes items like wood and paper products, chemicals for the construction industry, and agricultural inputs like seeds and pesticides.Bilateral Agreements
To promote trade and investment between the two countries, Ethiopia and Russia have signed several bilateral agreements.
Meanwhile according to OECD data in 2021, Russia has exported a total of $174 million products to Ethiopia of which $76.9 million worth wheat. Likewise, Ethiopia has exported a total of $26.7 million products to Russia of which $16.2 was coffee.
Future Prospects
In 2015, they signed a Memorandum of Understanding on Economic Cooperation aimed at enhancing economic ties and facilitating business interactions. Additionally, both countries have expressed their commitment to exploring new areas of cooperation through joint commissions and business forums.
Challenges
Despite the potential for increased trade and investment, there are several challenges that need to be addressed. These include limited awareness about business opportunities, logistical constraints, bureaucratic procedures, and the need for improved market access. Additionally, the COVID-19 pandemic has also had an impact on trade and investment activities between Ethiopia and Russia, as it has disrupted global supply chains and reduced economic activity.
Despite the current challenges, there are opportunities for Ethiopia and Russia to further enhance their bilateral trade. Both countries have expressed a willingness to explore new areas of collaboration beyond commodities trade, such as technology transfer, infrastructure development, and tourism. Furthermore, the establishment of direct air links between Addis Ababa and Moscow in 2019 is expected to facilitate trade and people-to-people exchanges.
In conclusion, while the volume of trade between Ethiopia and Russia has been relatively modest in recent years, meanwhile both countries have expressed a desire to strengthen their economic ties. The export of agricultural products from Ethiopia to Russia and the import of machinery and equipment from Russia to Ethiopia form the core of their bilateral trade.