UNCTAD’s Green Product Space methodology was used to quantitatively identify highly competitive green products for which Ethiopia has a revealed comparative advantage in production and export. Coffee, sesame seeds, leather, spices, pepper, cut flowers and bamboo products were identified accordingly. Subsequently, discussions among national stakeholders in national workshops in 2015 and 2017 concluded that the National Green Export Review (NGER) project of Ethiopia should focus on two of these products, specifically green products produced in: (1) the leather and leather products sector and (2) the sesame seed sector.
Stakeholders considered increased production and export of green products from these sectors would represent the highest market potential in terms of export sales; result in the greatest improvement of local environmental conditions; and would also generate the highest number of new jobs, particularly for the rural poor, women and youth. Accordingly, this report focuses on these two sectors.
Key findings
This report reviews global trends in the leather and sesame sectors, their role to the national economy, and Ethiopia's export policy framework, performance, and competitiveness in these sectors. In addition, the report also presents SWOT analysis that indicates remaining challenges and barriers that constrain performance in these sectors.
Major findings on the leather sector:
- Ethiopia has a growing absolute advantage in livestock production.
- There has been a fluctuating trend in export growth of the leather sector, globally and in Ethiopia. In Ethiopia fluctuations arise in association with supply and quality issues, lack of manpower skills, and unavailability of needed inputs such as chemicals, hides and skins.
- China is the major importer of raw hides and skins and major exporter of footwear and leather articles, and it currently is the world's largest leather products exporter.
- The major market destinations of raw hides and skins are Italy, China, and Hong Kong, China. Whereas the United States, Germany and Italy are the top destinations for the export of finished leather products and footwear.
- The share of Ethiopia's raw hides and skins exports in total exports is substantial whereas the share of leather articles and footwear remains small.
- Revealed Comparative Advantage (RCA) analysis shows that Ethiopia has a large comparative advantage in the export of raw hides and skins but not in the export of finished leather products.
Major findings on the sesame sector:
- Sesame seed is mainly produced in Asia and Africa which together account for about 95 per cent of the global production.
- There were more than 180 countries which participated in world sesame trade during the period 2006-2015 (both suppliers and importers).
- Ethiopia is among the top producers and suppliers of sesame seed in the world market.
- There has been a fluctuating trend in sesame export growth due to its high dependence on variable rainfall and price volatility in the global market.
- China, Israel and Turkey are the top importing partners of Ethiopia.
- In Ethiopia the sesame seeds (raw-sesame) account for most all sectoral exports with only an insignificant amount of processed sesame exports. Surprisingly, Ethiopia is a net importer of processed sesame products.
- Sesame seed exports have been contributing a double digit share to Ethiopia's total agricultural product exports.
- Ethiopia has significantly large comparative advantage in the export of sesame seeds, but it has not yet utilized this advantage to support its success as a competitive producer and exporter of processed sesame products.
