Ethiopia mulls comprehensive economic reforms to ease pressing forex shortage
INTERNATIONAL - The Ethiopian government on Saturday disclosed newly introduced comprehensive economic reforms that would help ease the East African country's pressing foreign currency shortage.
"We have now designed a comprehensive reform strategy to sustain and advance the economic growth and development in the country," state-run news agency ENA quoted Ahmed Shide, Ethiopia's Finance Minister, as saying on Saturday.
"Foreign exchange is one of the major bottlenecks currently, and we are working comprehensively to address that," Shide said, adding "the privatization we are embarking on will contribute significantly to that. It will bring significant foreign exchange."
The finance minister also said that as part of ongoing measures to ease foreign currency shortage, the Ethiopian government is also working on ways of broadening the remittance flow into the East African country from various parts of the world.
According to Yinager Dessie, Governor of the National Bank of Ethiopia, low productivity in the agriculture sector, particularly in the export items, has not been to the expected level.
"Similarly, export items from the industrial sector have not increased both in type and volume, thus inhibiting the fulfillment of the national target for gaining foreign exchange from the two sectors," Dessie added.
Ethiopia's finance minister said the Ethiopian government is exerting efforts to enhance productivity and encourage exporters to improve the amount and diversity of export items.
"We are also working on boosting our export performance and productivity on agricultural commodities, mining, tourism and other components of the service sector. All those strategies will help to significantly support our earnings from exports," Shide said.
Ethiopia's ongoing economic sector reforms mainly aspire to realize sustainable economic growth together with strong private sector engagement in various development projects.
As the East African country encounters persisting forex shortage in recent years, the Ethiopian government had recently announced to partially privatize its major state-owned enterprises as a solution to the serious shortage of foreign currency.
The plan to partially liberalize key sectors of the East African country's economy was made by the Executive Committee of the Ethiopian People's Revolutionary Democratic Front (EPRDF), Ethiopia's ruling party, in June last year.
The decision, among other things, aimed at expanding mixed ownership or outright full privatization of state-owned enterprises such as railway projects, sugar development, industrial parks, hotels, and other manufacturing industries.
It also plans to allow minority shares in Ethiopia's large state-owned enterprises, mainly Ethio-telecom, Ethiopian Airlines, electricity generation projects, and the Ethiopian Shipping and Logistics Services Enterprise.