It goes without saying that the recently implemented macroeconomic policy reform with assurance prepares the way for propelling the country’s economy to unprecedented heights at the earliest possible juncture. On top of boosting substantially the competitive capacity of exports and imports, the economic reform has already got the show on the road being instrumental in boosting competitiveness.
It should be born in mind that back in the daylack of foreign exchange was time and again posing a risk to a diverse range of business sectors. For the sake of truth, putting the new policy into effect will undeniably oil the wheels of earnings from a diverse range of sectors, uplift competitiveness and other things of a similar kind.
Other than enhancing foreign market expansion by revenue enhancement and strengthening capacities, the reform will give a shot in the arm to export trade in the timeliest manner possible. Apart from that the macroeconomic reform has embarked on fashioning a great opportunity for competitive funding options at the earliest possible moment.
Following the political change in 2018, the government has been implementing numerous economic reforms. Over the past six years, these reforms have aimed to address longstanding economic structural problems. The main inherited economic challenges include debt burden, inflation, unemployment, slow economic structural change, low sector productivity and competitiveness, poor performance of development projects, and resource mismanagement, according to sources.
It goes on explaining the policy and legal reform processes have brought new hope for the economy to transition to a more stable macroeconomic environment. The first phase of the Home-Grown Economic Reform Program (HGER 1.0), introduced in the 2019 fiscal year, included numerous policy ideas ranging from macro-financial to structural and sectorial.
Through the implementation of the HGER 1.0 Ethiopia has achieved significant economic objectives and goals. Despite the remaining reform areas, efforts to correct macroeconomic imbalances, alleviate debt burden, increase domestic production capacity, expand sources of economic growth, create job opportunities, and address structural bottlenecks have yielded positive results.
It has commonly been assumed that the newly implemented reform plays a paramount role in giving rise to macroeconomic management, attracting business investments, boosting overseas income in foreign currency and more of the same. In addition to taking the edge off shortage of foreign currency confronting quite a lot of sectors countrywide, concerned bodies should make every possible effort for the realization of the macroeconomic policy reform.
As the macroeconomic gap reform becomes involved in reducing the foreign exchange rate gap between the black market and various banks, the reform in the present climate has jumpstarted navigating in the right direction. There is no denying the fact that the macroeconomic reform plays a huge role in setting up a modern and sound macroeconomic policy framework that supports and ensures stability, resilience, and sustainability.
Apart from improving public sector capability that enhances the government’s capacity to make eminence and hassle-free service provisioning happen, the reform takes a leading role in getting higher manufacturing capabilities and development by snowballing investment and unsealing economic growth capacities all over the country.
By the same token, in addition to breathing new life into renovating investment and trade setting through a promising environment and prospect, the reform has the power of heartening and augmenting innovation and entrepreneurship.
The full implementation of macroeconomic reform policy in Ethiopia is a big change to further place the country as a more favorable destination for foreign direct investment (FDI), Ethiopian Investment Commissioner Hanna Arayaselassie remarked.
The government of Ethiopia announced recently that it has jumpstarted full implementation of macroeconomic reform policy.
In an exclusive interview with local media, Commissioner Hanna in the recent past said the macroeconomic reform policy is a very big change to further enhancing investment in Ethiopia. So far the nation had very good successes in attracting FDI, she said, adding but one of the burning issues and continuous challenges for investments has been shortages of foreign currency.
“The floating of the currency will have a very good impact on that. As investors look at Ethiopia as a potential destination for their investment, one of the key challenges that they bring up has now been addressed.”
Because in the previous discussions with investors, they had serious concerns as to how to access foreign exchange in terms of getting inputs, repatriating profits and be able to pay foreign debts, among other things, she said.
“Now with the unification of this foreign exchange regime, the concerns have been addressed for both the existing investors, especially those that are engaged in export trade and for potential investors looking at Ethiopia,” she elaborated.
Since the implementation of the macroeconomic reforms, positive results are being registered in various business sectors. If the reform keeps going in this manner, the country for sure will attain the anticipated goal at the earliest possible time.
As long as the key objectives and goals of the macroeconomic reform program makes its contribution in curbing inflation by revolutionizing the monetary policy basis, generating a favorable balance to get done the country’s national growth needs through domestic capabilities.
Notwithstanding the fact that some worryguts spared no effort to pour cold water on the topic of macroeconomic reforms of economic policy system with a focus on instigating chaos making use of their usual fake news message, their endeavors have been going the way of the dinosaurs.
Due to the fact that the reform has been flowing in the desired direction undeterred by challenges, every Tom, Dick, and Harry should turn a deaf ear to worryguts destructive intention.
The economic reforms that are being taken by the Government of Ethiopia will make a deep impact in the economic and investment landscape of the country, India’s Ambassador to Ethiopia, Anil Kumar recently said.
In an exclusive interview with Ethiopian News Agency (ENA), the ambassador commended the leadership of Prime Minister Abiy Ahmed (PhD) for taking many revolutionary steps, the recent macroeconomic reform being one of those steps. “The various economic reforms which are taken by the Prime Minister are going to make a deep impact in the economic and investment landscape of Ethiopia, one of the pillars of the Horn of Africa and the largest economy not only in Africa but among the world,” he elaborated.
The growth rate and the potential available to this country are certainly going to be unlocked, Ambassador Kumar said, adding that “This country is going to be an extremely favorable destination for investments across the world, including from India.”
According to him, the country has identified five important pillars for its transformation, agriculture, manufacturing, ICT, mining, and tourism; and these are all the sectors where India has core competence. Indian investors would certainly like to come to Ethiopia and explore these landscapes, he pointed out.
Furthermore, Ethiopia and India share a longstanding friendly relationship marked by robust cultural, economic and trade exchanges. Ambassador Kumar stated that the membership of Ethiopia in the BRICS gives it a much closer opportunity for a much closer interaction with the BRICS member nations.
The government will also engage in transparent communication with all stakeholders to mobilize support for its macroeconomic reform program. In addition, necessary measures will be taken to protect vulnerable members of society from short term negative impacts of the reform. Social safety net programs will be strengthened. In addition, low-income government employees will receive necessary wage subsidies, as stated by sources.
African Financial Integrity and Accountability Program’s Coordinator, Getachew Teklemariam recently told The Ethiopian Press Agency (EPA) that the macroeconomic reform is significant to realize economic development.
For years, there was a high level of loan burden in Ethiopia that forced the private sector to struggle with the inaccessibility of adequate foreign exchange. In the previous system, exporters paid taxes and importers were subsidized, but it was not fair and many business communities were harmed in such way. “That is why I said the macroeconomic reform is substantial,” he added.
“Indeed Ethiopian economy has been facing different factors such as conflict, but the macroeconomic reform is vital to bring sustainable development. However, the government should provide subsidy for those who might face challenges in the implementation period,” Getachew suggested.
The floating exchange rate would help the business community for facilitating activities and ensuring international competitiveness. In this regard, he said, the government has made its preliminary activities especially in supplying money so as to reduce shortages.
Among others, addressing foreign exchange crunch, boosting production and productivity, encouraging exporters, reducing parallel market challenge, attracting foreign direct investment (FDI) and filling the import and export gaps are the significances of the floating exchange rate.
BY ADDISALEM MULAT
THE ETHIOPIAN HERALD FRIDAY 30 AUGUST 2024
