The major aims of this paper were to assess Khat marketing and its export performance in the Ethiopian economy. The study used secondary data collected from different organizations. The data were analyzed using both descriptive and econometric methods. The descriptive study showed that the crop has crucial importance for the economy as a whole and the producers. The crop can also be cultivated by mixing with other crops and the production varies from region to region. The production is expanding rapidly in some regions of the country due to the high-income elasticity of plants than another crop. On the other hand, the plant seen as socially undesirable in some parts of the country due to its social ill. And also, the crop has several adverse effects on both social and socioeconomic factors of a country. As a result, the different country attempted to impose restrictions. On the other hand, econometric analysis result found that per capita income of importing country and real effective exchange rate are the most important factors which significantly affect Khat export in the long run in Ethiopia. Finally, the study recommended that there should be an appropriate policy towards the restrictions of further Khat expansion because it harbours considerable social and economic risks to the country.
Keywords: Ethiopian economy; Export performance; Khat; Khat export; Khat marketing