Procedures of payment for import and export trade in Ethiopia

Procedures of payment for in import and export trade goods

Due to the foreign exchange controls in place and will allow the importer to pay for the imported goods in foreign currency in Ethiopia the payment for imported goods transaction might be undertaken through Commercial banks. Thus, the payment arrangements have to be agreed with the importer’s bank. We will see franco – valuta based payment on other article.

In order to proceed payment through Commercial banks the importer must present/have

  • Business license
  • The importer has the account in the bank
  • A pro-forma invoice from the supplier

Thus, the payment issues is to arrange with the bank for the method of payment and obtain a bank permit. The methods of payment for imports used in Ethiopia are the following:


Documentary credit (L/C): is a written undertaking by a bank given to the seller at a request and/or the instruction of the buyer to make payment or accept and pay bill of exchanging (draft) drawn by the seller up to a stated sum of money within a prescribed time limit and against stipulated documents.


Documentary collection: is a method through which banks handle a seller’s commercial documents with or without financial documents in accordance with instructions received from the seller in order to deliver the documents to buyer (importer) against payment and/or acceptance or against other terms and conditions.


Advance payment: is a method through which a seller receives payment from a buyer prior to shipment or the agreed upon goods or rendering the agreed upon service.

  • Import-Payment though bank transfers
  • Export-Payment through bank transfers, traveler cheques, cash (as long as it is declared).

Once the payment issues have been completed and the supplier has been informed, the goods will be shipped to Ethiopia. Upon arrival of the goods at the port of entry in Ethiopia, they will be placed
in a customs warehouse and the importer must accomplish the necessary customs formalities.

What are the other formalities the importer should undertake? You can get in In the next articles.

Leave a Comment

Your email address will not be published. Required fields are marked *

Translate »
Scroll to Top
Apex Business Consultancy