Part 3: The coffee we cannot buy in Birr

A Record Is Not Enough

Ethiopia's coffee windfall, and what reached the farm gate

By Wondwossen Mezlekia

Part 3 of a five-part series. Parts 1 and 2 published June 26 and 28, 2026.

 

Part 3: The coffee we cannot buy in Birr

Walk into a kiosk in Addis Ababa and the coffee you are legally permitted to buy is, with narrow exceptions, the coffee the export market turned down. Grades one through five are reserved for export. What stays home is grade six and below. In the birthplace of Arabica, the household is left to drink what the world declined.

Ethiopia already drinks a remarkable share of what it grows. Sector estimates put domestic consumption near half of production, among the highest on the continent, in a coffee culture older than most of the states now advising it on the subject. Coffee here is not a lifestyle product waiting to be marketed. The roasting pan, the three rounds, the smell crossing a neighbor's doorway before the first cup is poured: nobody needs a campaign to understand it.

At African Coffee Week, Dr. Adugna Debela of the Ethiopian Coffee and Tea Authority and Ambassador Solomon Rutega of the Inter-African Coffee Organisation made the larger African case for domestic consumption, value addition, and intra-African trade. It is a serious agenda. Under the G25 initiative, twenty-five African producing countries are unifying standards and building regional markets, and the African Union has now adopted coffee as a strategic commodity in Agenda 2063. "Africa must learn to drink what it grows," Rutega has said, and for a continent that produces about twelve percent of the world's coffee and consumes only a fraction of it, the logic is sound. Their concern is legitimate. A stronger home market can shield growers from volatile world prices and keep more value inside producing countries. Even in Ethiopia, Adugna Debela has made the case for stronger domestic consumption alongside value addition and intra-African trade.

But Ethiopia begins from a different place than most African coffee exporters. It already has one of the continent's deepest domestic coffee cultures and consumes a large share of what it produces. Its problem is not that Ethiopians must be taught to drink coffee. Its problem is that the premium coffee market has been structured around foreign currency, export rules, and informal diversion rather than ordinary Ethiopian purchasing power.

I want to be fair to the fact that complicates this argument. Ethiopia's domestic coffee market is large, but it is not immune to war, displacement, inflation, or disruption.

The International Coffee Organization found that Ethiopian consumption had "seemingly plateaued" during coffee years 2019/20 through 2021/22. Its estimate showed average annual growth of minus 0.5 percent, compared with 1.7 percent in the preceding three-year period. The ICO attributed the slowdown to the two-year conflict between the Ethiopian government and the Tigray People's Liberation Front. After the November 2022 peace agreement, it recorded a 2.1 percent increase in consumption, to 3.7 million bags.

A domestic market can stall in a war. That does not mean Ethiopia has a cultural problem to solve by teaching people to drink coffee. It means conflict disrupted an already large market, and demand recovered when the disruption eased.

For premium coffee, access, not appetite, is the binding constraint. Since 2008, selling export-grade coffee on the open domestic market has been tightly restricted, a fact you can confirm in the USDA's own annuals, in the Institute for Security Studies' reporting, and in the peer-reviewed literature. The principle was always consume less, export more, the best beans held for hard currency. In 2023 the Authority created an exception, and the exception tells you everything. Directive No. 975/2023 lets graded, value-added export coffee be sold at home, but only in foreign currency, and only at hotels, airports, tourist parks, and conference centers, paid by card or by cash the central bank has verified. The ordinary Ethiopian earning birr is left outside the door.

That does not resolve the contradiction. It frames it. The state now accepts that premium Ethiopian coffee can be sold at home, and has decided it should be sold mainly to the person carrying dollars. A domestic market open only in foreign currency is not a domestic market. It is a foreign-currency window inside Ethiopia.

The state's own analysts know where the appetite goes when the front door is locked. The USDA attributes part of the recent rise in domestic consumption to export-grade coffee slipping into the informal market, where local buyers will pay more than the export price, alongside the spread of roadside roasting stalls in the towns. The demand for good coffee at home is not a theory to be stimulated. It is already being met, quietly and illegally, because the lawful version asks for a currency most Ethiopians do not hold.

So the continental agenda is sound, and the Ethiopian application of it is incomplete. A country cannot claim to be building a domestic coffee market while reserving much of its best coffee for the customer holding dollars.

Ethiopians are not a people who need to be taught to value coffee. We are a people who have been told that the best of what our own land grows is too valuable to be sold to us in the money we earn. There is a quiet insult in that, and the consumption talk only sharpens it.

The remedy is not complicated, and it is not mine. Let Ethiopians buy premium Ethiopian coffee in birr. Let local roasters compete for it in the open. A lawful premium market at home could do what seizures have not: reduce the premium contraband captures by giving consumers a legal channel to buy. It would give growers another source of demand when the world price falls. But I have stopped treating this mainly as a problem of directive design. It is a question of who the coffee is for. For nearly twenty years the answer, written into the law, has been: not the people who grow it, roast it, and pour it. I would like to still be writing this blog on the day that changes.

Source note: Ethiopian Coffee and Tea Authority, Directive No. 975/2023: domestic sale of value-added export coffee in foreign currency | International Coffee Organization, Coffee Report and Outlook, December 2023, p. 33 (domestic consumption plateau during the 2020 to 2022 conflict and the recovery after the November 2022 peace agreement) | Inter-African Coffee Organisation and African Union, G25 Kampala Declaration and the adoption of coffee as a strategic commodity in AU Agenda 2063 | remarks of Solomon Rutega (IACO) and Adugna Debela (ECTA) on domestic consumption and value addition | The Reporter, Premium Coffee for Local Market, But With USD | USDA FAS, Ethiopia: Coffee Annual | Institute for Security Studies, Organised crime pours cold water on Ethiopia's coffee exports

 

Next in the series, Part 4: The trees, and the land under them.

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