A Eyassu*, M Abebe and T Abate
Ethiopia is among major producing and exporting countries for gum and resin and the product has significant contribution for the national economy of the country. However, there is lack of information regard to the export, import and the trade balance. The objectives of this paper were: (i) To quantify the total income the country earned through export of gum and resin (frankincense), (ii) Estimate the total expenditure that Ethiopia spent in order to import gum and resin (frankincense), (iii) To evaluate the trade balance of the import and export of gum and resin (frankincense).
Ethiopia earned on average 10981427.81 US$ per year by exporting 2855.55 tonnes of gum and resin, whereas the country spent on average 3,676,743.77 US$ per year for importing 1,643.99 tonnes of gums and resins. The trade balance from the years 2009 to 2017 presented that the income generated from the export of gum and resin was more than the country expenditure to import the same product. This result clearly indicated that there were positive trade balance for nine years. On the contrary, the trade balance result further showed that in the years of 2018, 2019 and 2020 the expenditure of the country to import gum and resin was higher than the income of the country from export of similar product and these showed that there were negative trade balances. Therefore attention should be taken to substitute the import product and reduce the country expenditure using foreign currency.
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