A resilient economy at a time of calamity

Appearing before lawmakers yesterday, Prime Minister Abiy Ahmed responded to questions raised by MPs. The representatives put forward multiple questions in relation to current affairs with some members also demanding an explanation regarding some of the pressing challenges facing the country from the Prime Minister.

Responding to a wide range of MPs’ queries, Prime Minister Abiy Ahmed highlighted how the Ethiopian economy performed well and export grew in folds at a time of layers of unprecedented challenges describing the economy’s resilience as a subject of study for the economists.

Over the past year, Ethiopia has been going through trying predicaments from COVID-19 to the War in the northern part of the country.

The repercussions of the COVID pandemic, war, and droughts have been staggering; however, the country’s economy remained robust with the export and income registering substantial growth. “Foreign direct investment has surged by 23% in the last six months. The number of business licenses increased by 10%, and 8% renewed already existing business licenses. Our systems, however, need to be upgraded and modernized,” the Premier added.

It was also learned that over the last six months, loans to private investors have improved, Staying resilient during a time of war and natural disaster is unthinkable in countries like Ethiopia.

Unlike expectations, Ethiopia’s economy overcome challenges and stayed resilient, something worth investigating the incident, Abiy said. The country’s economy has been going through various macroeconomic reforms and the government put in place various mechanisms so that it remains active.

Establishing independent teams who oversee the national export and income sectors have greatly contributed to the good performance of the economy.

The government is planning to revitalize the finance and banking sectors to increase the forex reserve of the country.

Local financial institutions must invest more and prepare to compete with foreign banks that would set their foot in the country.

Abiy did not hide the predicaments facing the economy though. Inflation appears to pose burdens in all sectors.

Form upping costs, and consumer and market discrepancies, inflation is the major hurdle in the economy. While there have been different challenges that require a daunting task, there is hope that the economy will continue to stay afloat this year.

As to the Prime Minister in this budget year, Ethiopia could achieve the inflow of 1.63 Billion Dollar Foreign Direct Investment and as compared to the last budget year it showed a 23 percent growth.

Ethiopia has the capacity of pulling foreign investment. Only the energy sector can attract 40 billion USD. Significant macroeconomic measures are required to close the budget imbalance. When our exports exceed our imports, our country benefits, Abiy said adding that there is still a lot of work to be done in terms of developing a saving culture.

Preventing the stockpiling of key commodities, boosting consumer confidence, and minimizing costs are some of the measures the government should do to curtail inflation. Improving local production and reducing imports must receive due attention from the government as well.

The Ethiopian   23  February  2022

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