Bambis Supermarket, one of the leading supermarkets in Ethiopia, is set to shut down after more than sixty years in operation. According to the owner, the government’s restrictions to getting access to foreign currency have ran the retailer out of options.

Bambis Supermarket in Ethiopia will officially close its doors after more than 60 years in business. The supermarket, owned by Charalambos N. Tsimas, a Greek national, serves mainly the diplomatic community and, as such, heavily relies on imported products. The shortage of foreign currency in Ethiopia over the past few months has made Bambis unable to import and sell many of these products, like rice or table salt, and is pointed out as the main reason for its closure.

Shortage of foreign currency is not unknown to importers in Ethiopia. According to our sources, merchants often wait for months before getting a licence to access to currency and pay for imported goods and products across all categories have been affected.

In December 2017, facing the increased share of forex trading through the black market, the National Bank of Ethiopia (NBE) devalued the birr by 15% to close the gap between the cost of trading of the legal and black markets. Authorities also placed new restrictions on access to forex which meant importers would be given foreign currency on the basis of the international cost of their imports. This mainly aimed at addressing the fact that importers were getting hard currency from banks accounting for only part of the value of imports, getting the rest from the black market.

However, the measures taken by the central bank have been largely unsuccessful as the number of transactions in the black market have increased and the gap between the price of currency between the two has not changed, following adjustments in the black market fees, reaching up to 25%. Hard currency sellers don’t want to sell dollars to merchants at the official exchange rate, leading to forex shortage in the legal channels.

Mr. Simas, who himself and his family have had his share of disagreements with Ethiopian authorities in the past,  contends he has been waiting to get access to foreign currency since March 2017 and efforts to work with the government have not resulted in any changes. This, coupled with new regulations on product testing which dramatically increased costs, led to his decision to close Bambis Supermarket.