Effects of foreign currency controls on rural incomes and poverty in Ethiopia

This webinar, hosted by the CGIAR Rethinking Food Markets Initiative, showed how overvaluation of the Ethiopian currency can impact the income of farmers growing Ethiopia’s two main export crops, coffee and sesame. 

Macroeconomic policies can play a key role in the profitability and growth of a commodity value chain. In the past four years, Ethiopia has begun to intervene in the foreign exchange market, setting an exchange rate below the market value, forcing exporters to sell to the government, and rationing foreign currency to importers. 

This webinar explores how distortions in the market for foreign currency can have a significant impact on rural income and poverty, particularly for Ethiopian farmers growing export crops. It will also discuss how the negative incentives created by these policies are likely to overwhelm any benefits associated with targeted programs to support export crop value chains. 

Speaker and author 

• Nicholas Minot - Senior Research Fellow & Deputy Director, Markets, Trade & Institutions Unit, IFPRI.

Discussant 

• Alemayehu Seyoum Tafesse - Ethiopia Country Lead, National Policies & Strategies Initiative, IFPRI

Moderator 

• Rob Vos - Director, Markets, Trade & Institutions Unit & Lead - Rethinking Food Markets Initiative, IFPRI