The reform that served to build challenge resilient economy


Undoubtedly, vast reform activities have been taking place in Ethiopia for the past three years. Among these activities is the home grown economic reform the government of Ethiopia has formulated and started to implement during the noted period, Ahmed Shide, Minister of Finance said.

In his speech on ‘Addis Wog’ forum, which was arranged and held recently by the Office of the Prime Minister of Ethiopia, the Minister said that in addition to the economic reforms, the government has been able to carry out different political and social reforms.

As to him, the main objectives of the economic reform are to stimulate the stagnant growth; diversify opportunities of betterment; increase the role of the private sector in economic growth; gradually narrowing the macroeconomic gap along with increasing significant amount of employment rate and reduce poverty.

“However”, he continued, “The war that the terrorist TPLF has waged against Ethiopia and Ethiopians caused great damage to the country”. Mentioning that last year’s economic performance with the growth of 6 percent was particularly good, he explained the growth was positive and reinforcing. Besides, it was a year in which the overall reform works were intensified. In particular, the impact of GDP on the extent of the damage has not been momentous.

This year, however, the scale and nature of the conflict are so deep: It has caused a lot of direct harm to the people in particular, and the country in general. It was a year in which nearly 2 million people were internally displaced coupled with severe damage of many infrastructure and social institutions.

There is also a lot of revenue that should have been collected but not be practical due to the conflict. So, this is also an indicator of the impact of the war on the national economy. However, the economic reforms that have been introduced are vigorous and able to resist such challenges, and they are still somewhat resilient so that the overall macro-economy remains stable, he added.

Nevertheless, the situation is more apprehensive this year. In particular, the efforts to help the parts of the society who are affected by the conflict are tremendously demanding. According to him, over the past five months, the government has financed over 10 billion Birr to provide basic humanitarian assistance like food and non-food items.

This indeed, will continue in an organized manner until the displaced people be rehabilitated and begin to run normal life. In general, there is a slight slowdown in income generation. Despite there was a big problem in terms of job creation, the Minister further stated that there is a good export performance in the current fiscal year. As a result, the overall economy is in a better condition to cope up with the crisis.

As to him, life is as business as usual in areas other than the conflict-affected areas. The agricultural practice in different parts of the country has been undergone extensively. Likewise, foreign exchange earnings is said to be promising. However, preparing bulk of security forces that demands high cost become obligatory as a result of the survival campaign and the security situation in the country.

And as this requires resource restructuring, he pointed out that some cost-sharing has been done. Delaying and restructuring of some unfinished development projects have been carried out in this regard aiming to stabilize the national economy.

“Therefore, our growth potential to some extent is under great pressure. However, as the current trophy of the National Army against the terrorist TPLF is a landmark, we must continue to intensify our development and economic growth. The challenge resilience of the country when countering the conflict is mostly generated from the strengths of its economy,” the Minister noted.

Nevertheless, the country has also successfully completed the national election. Following formation of the legitimate government, various administrative services in most parts of the country go smoothly except in war-torn areas. Production and trading exchanges were also carried out properly. This has greatly increased resilience of the state.

According to him, the Diaspora’s concern for the country and its involvement has created a great deal of attraction. He further said that it was a time when Ethiopians and friends of Ethiopia have showed their unity even if the country was under extreme pressure. This concern can be taken as the actual economic, social and political asset of the country. But the country needs extra effort to build a more inclusive nation in the future, he underscored.

He further explained: “We will continue to intensify the ongoing economic reforms. Particularly, delivering of emergency assistance for the war victim community should be unceasingly the prior task to be done and strengthened. Apart from this, the government is undertaking various measures in order to restoring public services that have been distracted and disconnected by the terrorist TPLF. For example, in the areas of Wollo and Afar, telecom services have largely been restored.”

Restoration of power supply is also nearing completion. By the same token, potable water supply is also expanding; banking and other services are also resuming their activities. In particular, government development partners who have been working on such duties are working hard to solve the problems.

“In addition to running daily and regular services through providing daily goods, we will soon be conducting a comprehensive assessment in order to bring lasting solution for the affected communities in different areas of the country,” he said.

National Disaster Response Committee, headed by the Deputy Prime Minister that comprise Ministry of Finance, Ministry of Planning and Development, and macroeconomic committee is also getting ready to work in unison in order to give lasting solution. As to the Minister, comprehensive assessment is of paramount importance to identify the real affected community as well as the level of the damage.

The Ministry of Finance has also submitted a 5 billion Birr additional budget proclamation to the parliament for supporting the affected communities. Accordingly, the Ministry will further allocate additional budget for a comprehensive recovery and reconstruction.

In collaboration with development partners, the 400 million USD recovery and reconstruction program has been accelerated, particularly by the World Bank. Moreover, Disaster Risk Management is also developing a 350 million USD program.

Based on this result, restoring the community’s asset and their livelihoods; creating more job opportunities guided by better principle are the prior tasks that have been carried out by the government.

This must be done under the leadership and coordination of the government. Development partners and the community including Diaspora communities should be involved in this national call. Moreover, transparency, accountability, and fairness should also be the guiding principle of every humanitarian activity, he underlined.

While elucidating the government will design this program through conducting comprehensive assessment and evaluation, he revealed that this task can take 3 to 5 years as the level of the damage is enormous. The traumatized foundation of life is massive. Therefore, the government jointly with its people is working together to rehabilitate and bring them back to normalcy and launch strong government services in the areas.

In addition, the economy must be able to withstand the onslaught of war. In this regard, there will be various reforms at the macroeconomic level. Therefore, it is very important to reach national consensus on this issue.

Furthermore, it is a must to work hand in glove to move forward from this chapter to a peaceful and new one. Being able to cope up with this, working on building a common nation is still crucial for economic growth. The main demands of the people are to get out of poverty and ensure prosperity; create strong social interaction and build strong and inclusive government.

Underscoring that the government is very committed to this action, he explained that the nation’s economic potential is enormous as there is large population and other opportunities. The reforms that have been made to expand the sources of growth are very important. There are plenty of new opportunities in the sectors that are open to foreign investment.

Therefore, consolidated effort is essential to work together to ensure the discontinuation of the stagnation created by the war. As expanding the private sector’s economic source demands attracting highest foreign investment, it is significant to create a structured economy and stable state and society.

Apart from the national stability, Ethiopia is a country with a great responsibility in the region. Therefore, it is of paramount importance to solve its internal problem and show its contribution for the peace and stability of the people of the region and to work together to ensure that Ethiopia is the main actor of the region, he said.

The January 2/2022

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