Breaking the Black Market: The Case for Legalizing Foreign Exchange Trading in Ethiopia

Abstract

The foreign exchange black market has been a significant challenge in Ethiopia, affecting the country's foreign exchange reserve, import, and export activities. The Ethiopian government has implemented various measures to curb this problem. However, they have only partially practical. Legalizing the foreign exchange market in Ethiopia could be a viable solution to the problem of the black market for foreign exchange. These would bring the foreign exchange market under government control, increase the availability of foreign currency, boost economic growth, and create more jobs. However, the government must ensure that the market is adequately regulated to prevent illegal activities and that all transactions are conducted transparently and accountable. By looking to other countries that have successfully legalized their foreign exchange markets, Ethiopia can develop a successful model for regulating its market.

Keywords: Black market, legalizing foreign exchange, foreign exchange trading in Ethiopia

DOI: 10.7176/JESD/14-7-02

Publication date: April 30^th 2023