The Ethiopian Investment Commission has voiced its opposition to the recent ban on the importation of fuel-powered vehicles, arguing that this policy will negatively affect investors and foreign investments.
In a letter addressed to the Ministry of Transport, the commission expressed concerns about the appropriateness of the ban, particularly in the absence of a clear legal framework.
The commission highlighted that the decision to prohibit the importation of fuel-powered vehicles has had a significant impact on various sectors, including agriculture, agricultural product processing, flower farming, tourism, manufacturing, construction, and other activities.
The commission also requested permission to import fuel-powered vehicles for certain investment projects.
Ethiopia has completely banned the importation of petrol-powered cars since March 2024.
Companies engaged in importing cars from different countries have reported that they were informed of the ban by the government.
As a result, they were unable to import fuel-powered vehicles that had been transported from the Middle East, Europe, and South Africa.
Businesses and individuals involved in the car importation industry have suffered substantial losses due to the sudden implementation of the ban.
When the Ministry of Transport and Logistics announced the ban on fuel-powered vehicles to members of Parliament four months ago, the Ministry of Finance indicated that the ban was still in the planning stage and would not be immediately enforced.
However, since March, private fuel-powered vehicles have been prohibited from entering the country, except for those used in development projects and public transportation.
The government has justified the ban on private fuel-powered vehicles as a measure to prevent environmental pollution and reduce fuel costs.
Minister Alemu Sime explained that the government intends to encourage and promote the use of electric battery cars.
According to data from the Ministry of Transport, there are approximately two million vehicles in Ethiopia, most of which have been in service for several years.
To curb emissions from older vehicles, the government has been imposed high taxes on imported used vehicles.
In contrast, importers of new vehicles face lower taxes, and new vehicles assembled within the country are eligible for additional tax incentives and other benefits.
Prime Minister Abiy Ahmed mentioned during a discussion with loyal taxpayers two months ago that Ethiopia spends $4 billion annually on fuel purchases.
The Prime Minister emphasized that the country cannot sustain such high expenditure on fuel and stated that the government would support investors in importing electric vehicles and starting their assembly in Ethiopia.
