The effects of Trade barriers on the price determination of imported medical equipment in Ethiopia
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Date
2024-10
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Addis Ababa University
Abstract
Despite the price of medical equipment is expensive globally, most of the medical equipment importers have mentioned that trade barriers have also great influence on price of imported medical equipment. To put it simply, trade barriers are interventions in global markets. The study's objective was to determine the effects of Trade barriers on the price determination of imported medical equipment in Ethiopia. Therefore, it made an effort to determine which factors have the greatest influence on the price of imported medical equipment, look into government regulatory issues related to imports, evaluate how trade barriers affect the pricing strategies of suppliers and manufacturers of medical equipment, and learn how importers perceive the price of imported medical equipment. To this goal, a descriptive and explanatory study design was used in conjunction with a qualitative method. With a cross-sectional study survey, the study used an inferential and descriptive research approach. A qualitative investigation of 187 importers of medical equipment in Addis Ababa. Utilizing the census method. The study employed both qualitative and quantitative data collection techniques. SPSS version 27.0 was used for the analysis of the quantitative data, which were gathered via structured questionnaires. Additionally, to correlate the results with the findings of the descriptive analysis, qualitative data was gathered using case studies on three specific items of medical equipment. The results of the study show that the price of imported medical equipment is significantly impacted by shortages of foreign currency and incorrect custom valuation factors; tariff factors (tax and duty) only slightly raise the equipment's cost. Product registration affects the price of imported medical equipment by limiting the number of brands that can enter the market, however, its precise effect is unknown. The following recommendations have been delivered: the Ethiopian Food and Drug Authority (EFDA) should review the documentation requirements for product registration and eliminate unnecessary documents; the banks should provide foreign currency to importers of medical equipment; the customs office should implement a mechanism that allows them to know the correct price of the imported equipment instead of calculating tax based on estimating the price; and finally, the EFDA should implement a system to expedite the registration process.
Key words: Tariff Barriers, Product Registration, Custom Valuation, Foreign Currency Regulation, and price of medical equipment.