Ethiopia: Enterprise Monopolises Salt Distribution

Salt

The Enterprise plans to distribute 100,000 quintals of iodine-free salt in the next two months

In a letter written to the Ethiopian Industrial Inputs Development Enterprise (EIIDE) two weeks ago, the Ministry of Trade (MoT) gave the full mandate to EIIDE to be the sole distributor of salt that is used as industrial input.

The letter signed by Assed Ziad, state minister of Trade, granted the enterprise full authority to purchase and distribute iodine-free salt to the industries that demand it. Before the move of the Ministry, private investors solely distributed the salt.

The new arrangement does not have any connection with iodised and edible salt, according to Endris Negus, deputy chief executive officer of the industrial inputs development centre at EIIDE. "The distribution of edible salt will continue the way it is now, the new arrangement has nothing to do with that," said Endris.

EIIDE was first established in 1993 under the name of Merchandise Wholesale & Import Trade Enterprise (MEWIT) by the merger of two different entities. However, it was re-established as EIIDE in 2015. It had the aim of supplying basic commodities to industries either on a credit or consignment basis. This is in addition to its role as a commercial representative for various foreign companies.

EIIDE will distribute the salt to these industries from Afar Regional State straight to the different regions where they are located or arrange for them to get it from the Enterprise's warehouses. The new stream of distribution will minimise the contraband trading of salt, and protect consumers from buying iodine-free salts, which is not supposed to be used for food consumption.

This comes as iodine deficiency disorders are causing a serious health problem in the country, resulting in 52pc of women in the reproductive age and 47.5 of school-aged children to face the risk of iodine deficiency.

Previously the Enterprise has distributed 10,000 quintals of salt to the industries. It also plans to distribute 100,000 quintals within the next two months. But its monthly supply may vary from 50,000 quintals to 70,000 quintals depending on the demand.

The salt that is used as an industrial input has high demand especially from the leather producing industry which uses the product for preservation purposes. Besides the leather industry, the textile industry and wastewater treatment plants are reportedly among the sectors that use salt as an input.

The distribution system is also expected to bring about price stabilisation, thereby supporting the manufacturing industry and assisting them to be more competitive.

The price between the salt distributed by EIIDE and private distributors shows significant differences, according to a person who is involved in the business of leather distribution. The salt sold by EIIDE costs between 450 Br and 500 Br a quintal, which is 150 Br lower than the price charged by private distributors.

Some industry insiders welcome the move of MoT to assign EIIDE.

"Before the involvement in the distribution, there was a scarcity of salt for industrial purposes," said a leather distributor, who supplies the product to various tanneries in the country.

The shortage of salt was one of the reasons attributed to the drop in the exports earnings of leather and leather products of the country. The country earned only 115.3 million dollars in 2015/16, dropping by 12.4pc compared with the previous fiscal year, according to the Ethiopian Leather Industry Development Institute (ELIDI).

Previously some industries that use salt as an input used to get the supply from Afdera and Semera in Afar Regional State. Studies indicate that more than 250,000tn of salt is consumed annually in Ethiopia.

Anybody intending to buy salt for industrial input purposes should only do so from EIIDE or the act will be considered illegal, according to the new mandate given to the Enterprise.